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  • dorianpc Jan 20, 2013 10:06 AM Flag

    Options - off topic

    The options game is a loser for the small investor.
    Most options exire worthless. But you paid for them, didn't you?
    Risk is less, but on average, you are not going to beat the house at their own game.
    Shorts need options to cover their own bad guesses.
    Do yourself a favor, buy stocks when they hit their lows, and be worry free.
    I will repeat my mantra, It's not about how much you can make, it's about not loosing. Once you have lost principal, its FV is gone FOREVER.

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    • dorianpc

      Small clarification:

      "Most options exire worthless. But you paid for them, didn't you?" This statement implies that people are buying the options with the intent to exercise them. I believe the strategy is to profit by trading on changes to the option premium caused by market volatility. Meaning, most of the profit is already made by the time they expire and people let the expire without exercising on purpose.

      Sentiment: Strong Buy

      • 1 Reply to diamondx_8
      • dorianpc Jan 20, 2013 7:24 PM Flag

        What you say is true, and there are a lot of people that can profit. It is not something I favor becuase they are more complicated, and while the risk is lower, the reward is even lower (on average)
        On the other hand savvy investors can manage their profit and loss a lot better as long as the market is stable.

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