If you’re looking for an investment with zero risk, stop now. If you are retired, or just a few years away from retirement, then you can
invest in fully risk-free investments.
But if you’re not, your option is either low-risk investments, or high-risk investments.
If you’re the type of investor willing and able to face more
risk with some of your investing money, then you’re likely to take on high risk.
A number of investors chose high risk investments over low-risk
ones because of their potential to provide larger rate of return. Here are some
investments with relatively high levels of risk.
Leveraged Oil ETFs
Leveraged oil ETFs usually undergo high-volume trading
activity and are known for their high levels of volatility. They either provide
investors huge returns or losses.
They offer significant return on the pricing of several natural
energy resources through futures contracts, including Brent oil, West Texas
Intermediate (WTI) crude, heating oil, and gasoline. The height of increase is typically
2X or 3X the daily return.
Given oil prices’ volatility, trading activity reflects a magnified
level of volatility in its prices.
Options
Options provide sizeable gains for investors timing the
market. They are commonly seen as fast-moving, fast-money trades. Investors having options can buy a stock or commodity equity
at a given price in a future date range.
It also allows investors to join in a
stock’s price movement without the need to actually own the shares. A portion
of the cost of ownership and the leverage involved offer the possibility for high
returns.
Still, options can be tough plays, as they’re volatile,
levered, and speculative. Its time requirements on the purchase or sale of
securities are also what make it a very risky investment.
Initial Public Offerings (IPOs)
An IPO is a great time for a company, since it means the
business is doing well enough to need more capital to continue growing.
However, the chance of uncertainty is still high as to
whether the company will be able to accomplish essential tasks to drive the
business higher.
Some IPOs can offer investors the opportunity to acquire shares
while a company is extremely undervalued. This result to high short- and
long-term returns once a correction in the valuation happens.
Forex Trading
Better leave this one to the experts, as fast-paced changes
in currency rates are highly risky to sentimental traders and investors.
Trading
in the forex market is more suitable for investors, thier able to cope with further
pressures of currency trading.
Moreover, forex trading is also risky for investors seeking for
more returns, as its margin requirements are the same with the traditional
stock market.
Know the top forex trading strategies here at FSMSmart. Open
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trading platforms.
