So Why Is Options Trading a Better Way to Make Money in the Stock Market?
I thought you'd never ask. Options trading is FASTER. Options trading is also exceedingly efficient. Most importantly of all, options trading provides the highest return for a fixed amount of risk (in the case of cash options). A trader working in the cash options market (going long / purchasing puts or calls) limits the amount of potential loss to the amount of the cash invested, while leaving the maximum profit potentially unlimited. The beauty of this system is that in many cases a worthwhile amount of trading profit (over and above transaction costs) is possible for a retail trader (with a small amount to invest) in the options market, whereas the retail investor (for all intents and purposes) is shut out of making decent money (in a short time) in the stock market. I cover this elsewhere, but suffice to say options trading leverage makes all the difference.It's Still Important to Learn How to Make Money in the Stock Market
One consolation for learning how to make money in the stock market is that the knowledge gained is not lost when a trader makes the jump to options trading. Many of the terms you learn when trading stocks (bid, ask, commission, spread, return on investment, leverage/margin) mean the very same thing in options trading (see a glossary of options trading terms). The principal difference between the two is that owning a call option (for example) gives the option holder the right to BUY the underlying stock, rather than outright owning the stock itself.Learn more about options trading:
Teach Me to TradeOptions Trading Tutorial
Binary Options
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