Why Options Trading...

Why Options...


Leverage...Higher Return...Variety of Trading Strategies...Low Risk...

1) Power of  LEVERAGE...trading on pennies, you can make great return...

If you think Linkedin (NYSE:LNKD) currently at $105 per share, is going up in price, you purchase 100 shares at $10,500. Instead, you can buy 1 call option (one option contract represent 100 shares) which costs $2.50 per share, only paying $250 instead of $10,500 to enjoy profit from the upward price movement of Linkedin. ($10,500 vs $250, leverage = 42:1)

Similarly, if you think Linkedin is going down, you could buy put option instead of short selling the stock.

2) Higher Return On Investment...

If the stock price goes up $5, 4.76% [5/105] increased in stock price. For options with delta=0.8 (every $1 the underlying stock increases, the call option will increase by $0.80), your call option now worth $6.50 (2.50 + 5*0.8),  a whopping 160% return in options trading.[4.00/2.50]

3) Variety of Options Trading Strategies...

It doesn't matter whether the market is bullish, bearish or even goes flat, you can enhance your profit by applying the right options trading strategies.

4) LOW Financial Risk...

Risk Control...when you buy an option, your maximum risk is limited to the cost of the option (eg. $250 in above example). For those who write an option,  the risk is higher.