What Are Options?
"It's a way to control a lot more stock for a very limited amount of money.
It allows you to start off with a small amount of money and still make very good returns dollarwise."
Benefits of Using Options
Contrary to popular belief, buying options actually carries much less risk than owning stock.
Get Started With Less $
Options cost a fraction of the cost of owning the stock, yet they can have similar gains. This allows you to start investing with less money.
Keep Up With Competition
Options are growing in popularity, if you don’t use them to your advantage, you may not be able to keep up with your competition.
If you buy 100 shares of a $100 stock you risk $10,000 and the stock must go to $200 for a 100% gain.
If you buy one call option at the 100 strike for $100. The stock needs only to finish at 102 for a 100% gain.
Unlimited Profit Potential
If yo buy a call, you make money as the stock rises above the cost of the option. How high can a stock price go? There is no limit.
If you can think of a something the market will do in the future, there is an option strategy to profit if you are right.
Options can be used to provide insurance on your investments. You can buy insurance on your stock positions, the market as a whole, or on other option positions.
Use Options To Buy Stock
Smart Investors can use options to buy stock at a lower price than the open market.
Don Fishback has been widely recognized as a market probability and options expert by companies you may know.
Options Are Growing In Popularity as Investors Learn More
Option Volume at the Chicago Board Options Exchange (CBOE) has grown from 357 million in 2004 to 1.271 billion in 2018. Over the same time period, the lower chart shows that the number of searches where people enquired “What are Options?”, quintupled.
But I’ve Heard Options are Very Risky
The truth is, options are less risky than buying or selling stock. This is probably the number one myth about options. It is usually stated by folks that don't understand how options work.
There is much more to be said about options. Not learning about them could put you at a disadvantage in the markets.
Option Trading Elements You Should Learn About
Buying Call Options allows you to make money as the stock moves up. It carries limited risk and has unlimited profit potential. Call options are more complex than stock, but they are still very simple. Click Here to learn more about call options.
Selling Call Options without buying some sort of insurance is one of the riskiest trades you can make. It carries limited profit and unlimited loss potential. When talking about risk, this is probably where the options are risky myth comes from. Click Here to learn how to avoid unlimited risk.
Buying Put Options allows you to make money as the stock moves down. It carries limited risk and makes money till the stock goes to 0. It is far less risk that selling short the stock. Click Here to learn more about put options.
Selling Put Options has the risk of buying the stock at the strike price. It carries more risk than buying a put, but it carries less risk than buying the stock. Smart investors often use this element to buy stock cheaper than you can get it in the open market.Click Here to find out how.