Published: May 31, 2026 • By Rick Allison, CFP®
Lately, I am seeing a whole of people who are promoting themselves and their options strategies and or their stock picks. I can tell you from decades of experience, that I have seen this play out before. As long as the market goes up, then everything is fine. However, when it goes down, then these "experts" suddenly vanish.
First, these "expert" stock pickers. Most of these stock pickers on X are promoting pretty popular stocks like Nvidia, Microsoft, Service Now, Sofi and others. How they hook you in is by showing you their trading history. Note: There trading history is meaningless to you!
There is nothing wrong with these particular stocks, but what happens to high flying stocks when the market goes down? They decline and they typically do so rapidly. This is my issue. The run up in the stock price has already happened and if you load up now, then you are likely to lose money. You would mostly likely be buying at their 52 week highs.
Let's look at the options strategy that I am seeing. Several X users are saying they are buying Calls on high momentum stocks that are moving fast and making lots of money. Some have even disclosed their actual trading history. This is fine, but I have several issues with this idea.
One issue is the fact that 95% of investors would not know an Options Call from a Phone Call. The second thing is that most investors are not do-it-yourselfers. I do not want to get into the weeds on Options as a strategy, so I am going to keep it simple and only pick two Options strategies. One is buying Calls and the other is selling Calls.
As a former Series 9/10 Branch Manager II for Charles Schwab & Co., Inc., I can tell you that the majority of people who Buy Calls lose money. The people that make money with an Options Strategy tend to do so by Selling Calls, not by Buying Calls. So, be very careful with buying Call Options. It is not for the mainstream.
For a Call options strategy to work, then you have to put down real money to purchase (Buy) a Call. It only pays you back if your underlying stock exceeds the strike price. For example, assume you bought a 3 month Call with a $100 strike price and the current price is $90. There is a premium to Buy a Call that you have to add on top of the strike price. So, if your premium was $5, then your breakeven is $105. You only make money if the underlying stock exceeds the $100 strike price, plus the premium you paid for the Call. If it does not exceeed $105 in this example, then you lose everything that you paid for that particular Call. Poof! Gone forever! So, be very, very careful listening to these X "experts" touting buying Calls.
These experts benefit when you click on their "investment advice" story. The more clicks, then the more money they make. That is how these social media sites work. Almost in every case, these people are not licensed to give investment advice. It is the wild west out there. Buyer beware.
Important: Sound investing strategies are always better than get rich quick schemes that you will later regret.
Would you like to discuss whether... may be right for you? Call Rick at (904) 460-2700.
This article is for informational purposes only and does not constitute legal advice, personalized investment or tax advice. Please consult with your legal or tax professional before making any decisions.