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HELPING TRADERS SUCCEED “The human side of every person is the greatest enemy of the average investor or speculator.” ~ Jesse Livermore

Power of Options Trading

Power of Options Trading

Options can:

  • Control large blocks of stocks with call options that are going up with a small
  • amount of capital.
  • Short stocks with put options so you don’t have to find shares to borrow or use
  • margin to sell short.
  • Sell options short to other traders.
  • Buy a hedge using put options to protect your long-term stock holdings from a
  • downtrend instead of selling your stock holdings.
  • Manage your risk with predefined maximum capital at risk, limited to the price
  • of the option contract.
  • Buy or sell time value.
  • Buy and sell volatility.
  • Bet on a stronger trend than the market is pricing in, but bet on both directions
  • at the same time (straddles and strangles).
  • Create synthetic stock positions using options with little capital outlay (Selling
  • a put and buying a call option, or the reverse).
  • Sell an option and hedge it with a cheaper option so your short doesn’t have too much risk.
Trading Monk

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