Why trade options instead of stocks? I love this question because I’ve done both and a whole range of other markets and instruments over the years and right now I absolutely know stock options are the best vehicle to use to trade stocks.
The why is simple…
Stock options are the greatest use of my resources.
Stock options are cost-effective because I can control the same 100 shares for a fraction of the cost.
Margin requirements only require the purchase price to be paid and no longer do you need the margin for the stock you control (they assumed you would take delivery)
Stock options are now used as a cost-effective choice to speculate with instead of outright stock purchase with options in stock available with 2-years to expiration it really ensures trading with options is affordable and reasonable for all.
Stock options are truly fixed risk and, if they are new to you, they are just like a deposit in that you can never lose more than your deposit. (When buying stock options)
This means that if I’m wrong or a black swan event happens with me on the wrong side of the movement. I can never lose more than the cost of the stock option no matter how bad things get.
As such stock options have risk control built into them by their very nature and you will never fall prey to a stop run or ever be stopped out again.
This further means that you can let your analysis “play out” which, for my student and myself, has increased my success rate dramatically with some of my students reporting as much as 80% of trades being closed profitably.
In today’s world stock options are now a smart way for the retail trader to not only use as an alternative to stocks but to actually start competing with the institutions for performance-based results and benefit from portfolio strategies without any major capital outlay.
This is why I trade options instead of stocks and why you should consider stock options too.