About a year ago, our colleague Frank Bermea, publisher of StreetAuthority’s sister company, Profitable Trading, met a man named Jared Levy, who knows more about options trading than anyone we’ve ever met.

#-ad_banner-#Jared is something of a wunderkind. He began trading options at age 16 and quickly found himself making upward of $600,000 a year. Nowadays, you might find him regularly featured as a guest on financial news programs like CNBC or Fox Business. (In fact, he appeared on Fox Business, to discuss Apple, among other things. You can check out the video at this link.)

If you’ve been a regular reader of StreetAuthority Daily, then you know that we’ve been growing concerned about the possibility of a market correction.

No, I’m not saying you should sell all of your investments and run for the hills (yet), but you need to have a plan for when this bull market turns on its head.

Jared agrees. In fact, in his second official issue of Profit Amplifier, a new options service launched by our friends at Profitable Trading, Jared warned his readers about “The Turn” — which he defines as “the moment where the market morphs from a seemingly stable bullish state into a doubtful, bearish frenzy that has investors rushing to sell high-flying stocks and jumping into defensive names.”

This is where Jared’s expertise in options comes into play. We’ve told you about conservative options strategies like put selling or covered calls in the past, but in Jared’s new service, he does something different… he buys puts and calls on stocks.

Now, this strategy isn’t for everyone. But in the current market environment, making bearish bets on overvalued stocks should hold appeal for many investors.

That’s because, as we’ve mentioned in recent months, the current bull market is one of the longest in stock market history. And the overall stock market’s valuation in general is “getting up there.” Take a look at the chart Jared shared with readers in the inaugural issue of Profit Amplifier:
 

According to Jared:

I agree with Jared’s analysis. But rather than use this as an excuse to sell everything and sit on the sidelines, I think there’s still money to be made in this market. One of those ways is by shorting overvalued stocks. Another is to ride the momentum in fundamentally-sound companies that are “breaking out” — the kind of stocks my colleague Jimmy Butts and I discuss in our premium advisory, Maximum Profit.

Another option is to buy puts, something Jared regularly recommends in his new service, Profit Amplifier. By buying put options, Jared and his readers are making bearish bets on overvalued stocks that they think are poised to fall. And in contrast to simply shorting an overvalued stock, with options your potential returns are magnified. (To watch an interview where Jared explains options and his strategy, go here.)

Simply put, options are a great way to not only amplify gains from stock moves, but also to hedge your portfolio positions and manage risk. The best part is that you do not need to work for a Wall Street hedge fund to master these basic techniques — you can easily learn it on your own.

If you want to learn more about Jared’s experiences, including how he learned his craft and how you can too, then check out the interview Jared recently did with Profitable Trading’s publisher, Frank Bermea. You can watch the video here.