High Risk Investments that Give High Returns

High Risk Investments that Give High Returns

Trying to find an investment that doesn’t have high risks but has high returns can be very detrimental.  It’s almost impossible to find an investment like that.

Of course, you can always try to mitigate the risks that you take.  Or you can just choose those investments that have very low risks, though you’d have to settle for the low returns.

If you want to garner higher returns, you might have to incur higher risks.  It oil boils down to the high-risk-high-reward adage.

If you’re willing to invest in high risk investments in exchange for the high rewards that you may get, here are some of the best investments you can check out.

Leveraged Oil ETFs

Leveraged oil ETFs usually have high volume trading activity.  These are also known for their high levels of volatility. Depending on how successfully you can use them, they provide either tremendous gains or huge losses.

They provide high returns on the pricing of several natural energy resources through futures contracts, which include Brent oil, West Texas Intermediate crude, heating oil, and gasoline.  The height of increase is normally double or triple the daily return.

Trading Benefits reflects the oil prices’ volatility level in their prices.

Options

Options give sizeable gains for investors that are trying to time the market.  They are normally seen as fast-moving, fast-money trades. Investors who own options can buy a stock or commodity equity at a predetermined price in a future date range.

Options also enable investors to join in a stock’s price movement without the need to really own the shares.  A part of the cost of ownership and the leverage involved give the chance of higher returns.

Even so, options are still tough game.  They’re volatile, leveraged, and speculative.  The time requirements on the purchase or sale of the securities also add to the riskiness of the investment.

Initial Public Offerings

When a company is having an initial public offering, or IPO, it usually means that the business is doing very well that the company needs more capital to sustain the growth.

On the flip side, the chance of uncertainty is still high since we’re not entirely sure if the company will be able to accomplish the important tasks essential to driving the business higher.

Some IPOs can give investors the chance to acquire shares while the company is extremely undervalued.  This leads to high short and long term returns once the correction in the value happens. That is, its share price becomes higher.

Forex Trading

The forex market is the most liquid market among the financial markets.  It’s also open 24 hours a day. That means you can tailor-fit your trading schedule to the market.  You can also short sell freely on the foreign exchange market. That means you can make money out of both a rising and a falling market.

On the other hand, these benefits do not come without risks.  You have to understand that choosing a currency pair to trade isn’t easy as cake.  You also have to have excellent risk management strategy since currencies are rarely predictable for long.

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