Options can take your stock trading profits to a dramatically higher level...and cut risk
at the same time!
As I write this, I have a position in ABX, American Barrick. I bought the January 2018 19 Call at $.63. It's now at $1.03 for a juicy profit of 63%! And I think I will make a lot more money! I'm still holding it!
At the same time, I couldn't lose more than the $.63 that I invested in the beginning. So limited risk with mammoth profit potential! You see why I love options?
I would have nice profit in the stock if I owned the stock but my profit in the option is dramatically more profitable!
I'm also long GOLD, Randgold Resources. I've got the January 105 Call at $3.15. It's now at $6.05 for a monster profit of 92%!
I'd be up about 6% if I just bought the stock!
This highlights the first big advantage of trading options instead of stocks: much much much higher profit potential.
The second big advantage of options is the low investment needed. I only needed $63 to buy the first option and $315 for the second option. So you can invest in options with very little money. You don't need a bit pile of money to trade options, just a few hundred dollars to get started.
A third great advantage of options is the limited risk of most trades. The most you can lose when you buy options is the initial purchase price. No need to monitor the market or put in stop loss orders. The options market automatically limits your risk! You can sleep easily at night!