Why Invest in Stock Options?

Although stock options have a reputation for being risky investments that is complex and, therefore deemed too difficult to understand, one fact that is undeniable is that its popularity has definitely grown in leaps and bounds in recent years.

While many may have had unpleasant encounters with stock options due to being inexperienced in the field, thus led to

improper usage, options can be useful to the individual investors.

Often seen as fast-moving, fast-money trades, stock options are sharp, versatile tools, which will enable you to adapt or

adjust your position according to any situation that arises and also add value to your portfolio.

Great Leveraging Power

Option investors has the ability to control the same amount of equity

by coughing up a fraction of the capital needed. Desirable for short

term speculative trading purposes, leverage can be achieved using call

options, also known as stock replacement, that is feasible, practical

and cost efficient.

Higher Potential Returns

A higher percentage of return is achieved if you spend much less

money and make almost the same profit. Stock options requires you

to commit less capital to an investment than a stock or other type of

market trade requires.

Limited Risk of Loss

As you have complete control over the exposure to risk, stock options

allow you to create trading strategies with high probabilities of

success, of course depending on how you use them. Due to their less

financial commitment requirement and relative imperviousness to the

potentially catastrophic effects of gap openings, stock options

basically commands less risk. They are also safer than stocks as they

are the most dependable form of hedge.

Wide Array of Options Trading Opportunities

Available in a wide range of markets, such as agricultural products,

metals, foreign currencies, interest rates, soft commodities, index

products, energy products and many more, you are bound to discover

a trading opportunity or two at almost any time.

Liquidity Of The Market

As transactions can be executed quickly and easily, the market is the

considered liquid and therefore your money is not tied up for a long

time as it is in trading shares. Re-investments are possible which then

lead to many more chances to make profits.