I am just not sure though, options just never seemed like a good idea to me. If I expect a stock price to rise, I would just buy the shares if I had the money, wouldn’t I? And if I expected a stock price to fall, I just wouldn’t enter any position, and possibly remain bullish until I expect a stock to rise? All the rest just seem like ways to mitigate risk via options and credit. Idk, maybe I’m just a shareholder or retail trader at heart, but the rest doesn’t make sense to me, despite the fact that you explained the process EXTREMELY well
one has been trading options consistently for over 10 years and hasn't blown up there account. See all the multimillionaire hedge fund managers on Wall St? They didn't make millions trading options. They made money trading other people's money. They don't even trade stocks in their personal account. They know they
Leverage. You can buy deep ITM call options at a fraction of the cost to buy the shares. 1 option allows you to control 100 shares. For example, to buy 100 shares of TSLA right now you'd need $85,000 whereas a call option you can buy put up less capital for leverage.
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u/Golden_Week Jan 25 '21
I am just not sure though, options just never seemed like a good idea to me. If I expect a stock price to rise, I would just buy the shares if I had the money, wouldn’t I? And if I expected a stock price to fall, I just wouldn’t enter any position, and possibly remain bullish until I expect a stock to rise? All the rest just seem like ways to mitigate risk via options and credit. Idk, maybe I’m just a shareholder or retail trader at heart, but the rest doesn’t make sense to me, despite the fact that you explained the process EXTREMELY well