11 Ways to Buy Stocks: Take Advantage of Market Opportunities

Do you want to invest in the stock market but think it’s too expensive? Good news – there are lots of ways to buy stocks, no matter how big or small your account is.

Whether you’re working with a tight budget or ready to go big, there’s a strategy for you.

Today, we’ll go over some easy, flexible, and even fun ways to invest in stocks without spending a ton of money.

No matter what your financial situation looks like, you can find a way to start investing that works for you.

How to Invest in Stocks Step-by-Step

The interest to buying stocks continues to rise because of the top AI names that dominate the headlines.

But in order to take advantage of this opportunity, there are few steps and strategies to know.

1. Open an investment account
2. Transfer in money from your bank account
3. Research what individual stocks you like
4. Stock investors should consider mix of exchange traded funds and individual stocks
5. Optimize your portfolio with size and strategy
6. Learn how to sell or trim the position

Why You Need to Know These Strategies

Knowing different ways to go long on stocks is like knowing shortcuts in a video game – you don’t always need to play the traditional way, and you might save time and money.

If you want to be strategic about how you invest, having different tools is super useful.

If you want to grow your money and your wealth, understanding how to take long positions in stocks is super important, but crafting strategies that work for you and your investment account are also important.

Good News: These strategies aren’t just for the experts.

Once you learn them, they can give you an edge and help you feel more confident about investing in the market.

Ways to Buying Stocks

Many new investors struggle on where to start, so before we get started with all of the strategies of stock investing, you’ll need a few things.

Going long in the stock market can mean more than just buying stocks directly.

There are lots of creative ways to invest money as stocks go up.

Here are some of the most interesting and flexible ways to do it:

1. Classic Stock Purchase

The old-school way: Buy shares directly.

You buy stock and make money if it goes up.

It is simple and lucrative if you are right, but it does take more money especially for the more expensive.

If you believe in a company’s growth and want to hold for the long term, this is a solid choice. Even taking the DCA (Dollar Cost Averaging) approach, putting a little more money invested into your favorite stocks each paycheck.

Buying shares outright means you get all the benefits of price growth, dividends (if they pay any), and ownership in the company.

It’s the classic way to invest and works well for beginners who want to learn the basics.

2. Cash-Secured Puts – Get Paid to Buy

Sell put options at a price you’d be happy to pay for the stock.

I love this strategy and it’s one of my favorites. I have performed quite well using it along with my other favorite strategies in Tesla.

Look at the results with this strategy and Tesla over the last couple of years:

If the stock drops, you buy it at that price, which discounted from where it was trading at earlier than you put on the position.

If it doesn’t, you keep the money (premium) from selling the put. Creating a nice little cash flow from the time you held it.

It’s a good way to enter a stock position or earn income while waiting.

This strategy is good for people who want to buy stocks anyway but are waiting for the right price.

The only downside is if you are exercised on the option, you will need the cash for the position.

3. Call Options – Small Investment, Big Potential

Buy call options if you want the upside without using as much money.

A call option gives you the right to buy a stock at a certain price.

For smaller accounts, this can be an affordable way to take advantage of big price moves.

SPEND $2000, instead of coming up with the cash to buy a bunch of shares. You can spend say $2000 on a Nvidia (NVDA) 1 call option, and see I nice return on your capital.

However, keep in mind that options can expire worthless if the stock doesn’t move the way you want, so it’s best to give yourself plenty of time with this strategy.

It’s a bit riskier, but if you know what you’re doing, the potential gains are big compared to what you put in.

4. Covered Calls – Earn While You Wait

Own the stock and sell call options on it to make some extra money.

If the stock doesn’t rise quickly, you still earn money from selling the calls. It’s like renting out a room in your house – you make some income on what you already own.

Covered calls are perfect if you think a stock will go up slowly or stay flat for a while.

This way, you can make extra money without doing anything else.

Plus, it lowers the risk a bit since you get paid by selling the call.

*FYI, one option is equal to 100 shares, so consider that with your position.

*Mix this strategy with #2 selling puts, and you got yourself the “Wheel” strategy.

5. Options Collars – Adding Protection

Buy the stock, then use an options collar to protect yourself.

You buy a put to limit your losses and sell a call to help pay for that put.

This limits your potential gains and losses, which is good if you’re careful but still want to invest.

Options collars are great for people who want some level of security but still want to take advantage of the stock market’s growth.

You won’t see huge gains, but your losses are limited, and it gives you peace of mind.

6. LEAPS – Long-Term Options

LEAPS are long-term options that let you bet on a stock over a long period without buying it outright.

They give you leverage with less risk from time decay, making them good if you believe a stock will grow over time.

LEAPS usually expire after one or two years, so they give you more time for your prediction to work out compared to short-term options.

This makes them a better fit for long-term investors who are patient and optimistic about a company’s future.

7. Synthetic Long Stock – A Clever Alternative

Make a synthetic long position by buying a call and selling a put at the same price.

This works like owning the stock but costs less upfront.

It’s great if you want market exposure without a big initial investment.

The risk and reward are similar to owning the stock, but you get in without paying full price.

This is a common method for people who understand options and want the benefit of stocks without tying up as much cash.

8. Margin – Borrow Money to Buy

Buying on margin means borrowing money from your broker to buy more stock.

Not always recommended, but you could get more shares with less of your own money. Just know that losses can also be bigger if things go wrong.

This is for more experienced investors.

Margin lets you increase your buying power, which can be great in a rising market, but it’s risky.

If the price drops, you could lose more than your initial investment, and you’ll still owe the broker money.

9. ETFs – Spread the Risk

Buy a long Exchange-Traded Fund (ETF) to get exposure to many companies at once.

If you don’t want to bet on one company but think a whole sector will go up, this is a good option.

ETFs are great for beginners because they are diversified, meaning your risk is spread out across many companies.

You can choose ETFs that focus on certain industries, like tech or healthcare, or broader ones that cover the entire market.

10. Bull Call Spread – Limited Risk, Limited Reward

Buy a call option and sell another call at a higher price.

This makes the cost lower, but it also limits how much you can make.

It’s a cheaper way to bet on a stock going up.

The bull call spread gives you profit if the stock price goes up, but it’s capped, and it lowers your overall risk.

It’s a nice compromise if you want to get into options but still limit your exposure.

11. Fractional Shares – Buy Just a Little

If a full share of a stock like Amazon is too expensive, buy fractional shares.

Many brokerages allow you to buy small pieces of a stock, making it easier to invest even if you don’t have a lot of money.

Fractional shares are a great way to start investing in high-priced stocks with just a few dollars.

You get all the benefits of owning the stock, like growth and dividends, but you don’t need to pay for a whole share.

Key Considerations for Your Brokerage Account

Choosing a strategy depends on how much money you have, how much risk you can handle, and what you think will happen in the market.

If you’re just starting out, begin with simpler strategies like ETFs or fractional shares.

You want to learn how the market works without taking on too much risk, but you will need a brokerage account that has the ability to operate with margin to be able to take advantage of these option strategies listed.

Always understand the risks and rewards of each method before you jump in.

Some methods are straightforward, while others need more experience and understanding.

Taking Stock Investing to the Next Level: Boosting Your Gains

Once you understand the basics of investing in stocks, you can boost your gains by combining these strategies to maximize your potential results.

For example, use cash-secured puts along with covered calls to create an income-focused portfolio.

Or try dynamic collars for better risk management and more growth.

You can even use margin to amplify gains, but only if you understand the risks.

Remember, going long isn’t just about holding a position and hoping the share price goes up – it’s about being smart about how you hold, when you adjust, and how you protect yourself.

Ultimately, actively managing your portfolio with different strategies can help protect your brokerage account, but can also boost your potential for higher returns.

With time and practice, you’ll find the strategies that work best for you.

Alternative Investment Strategies

• Short Selling: This is the opposite of going long. Sell stocks short, and you make money if the stock price goes down. This is much riskier because if the price goes up, your losses can be unlimited.It’s a good method if you have a strong belief that the stock will fall, but it’s not for everyone. I’ve done it many times with mixed results, and I just struggled with the timing of the position. I was eventually right, but never really timed it right.
• Inverse ETFs: These ETFs go up when the market goes down. They can be a good way to profit in a declining market. If you think a certain sector is going to struggle, an inverse ETF is an easy way to bet against it without short selling.
• Hedging with Puts: You can buy puts to protect your stocks in case prices drop. This way, if things go wrong, you’re covered. It’s a good way to limit losses on stocks you already own. It’s not really an alternative to going long, but rather a way to make your long positions safer.

Bottom Line: My Experience with Going Long

I’ve tried both stock investing and using different options strategies in my stock portfolio. I’ve found that a mix is the best way to take advantage of this new AI supercycle that we are living.

There is no one perfect strategy, but having a few tools in your toolbox helps you handle whatever the market throws at you.

The best way to get started is to pick one strategy that fits your goals, practice it, and learn as you go.

It’s important to remember that investing is a journey.

You won’t learn everything at once, but even a small account can grow over time if you stay strategic and keep learning.

The key is to take action, start small, and keep building your knowledge and experience.