Aren’t Options Risky?
A lot of people think that options are very risky. In reality if you do your homework, like you should before you buy any stock or options, they are no more risky than buying stock. In fact in most cases it is less risky because you are using leverage. You can control more shares with a lot less money. Just like stocks you should know your exit point and set a stop or a trailing stop. Once you understand basic options you can move on to trading spreads. With spreads you can limit your risk a lot more and in some case you can even repair or adjust a trade that goes the wrong way. If you own stock you can use options to protect you from a down turn in the stock price. I will discuss all this and more in up coming blogs.
