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If you think Wall Street is there to help you to make money, think again. That's why the so-called "experts" are quick to tell you that "too-risky" options trading is for hard-core speculators only. They also tell you that they are the fastest way to lose money.
Of course they do. Why should they share this moneymaker with you? They'd rather keep it for themselves.
That's why Money Morning's options trading specialist, Tom Gentile, just laid out the seven best reasons to trade options that anyone can follow.
You see, when the stock market is as volatile as it's been so far in 2018, options can actually help you reduce risk while you profit from big swings. In fact, he says options trading is the only option when it comes to cashing in on volatility.
Just look at the key benefits of options trading in 2018…
- Less of Your Money Required
Options cost a fraction of shares of stock. And your risk is limited to the price of the options you purchase and no more. Let's say you're interested in buying a stock priced at $60.00 per share. Its near-the-money option might cost $5.00. Even if you are 100% wrong, you stand to lose only $5.00 (or $500 per contract). Buying 100 shares has you on the hook for $6,000.
Easy, Fast, Lucrative: When it comes to making money, Tom Gentile likes to keep things as fast as possible. So he's invented an exciting way you could pocket $1,000, $1,500, even $2,000 in four days or less. Learn more…
- Bang for Your Buck
Let's say your stock moves up to $65.00 per share. The option might go up to $9.00. The stock gained 8.3% but the option gained 80.0%. Of course, the profit potential has a lot to do with which option you buy, but you get the idea. This theoretical gain was mild. Triple-digit gains are much more common with options.
- Risk Control
Certain options strategies give you the opportunity to profit from a stock's movement with even lower risk. Since there is no free lunch in trading, you do give up some of your windfall profit potential, but it is worth it to make steady – and still healthy – profits over time.
And those aren't the only reasons to start options trading in 2018…