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Why Options Trading Is Better Than Stock Trading

Author: Ruben Ruiz

Stock trading is (at least for those insiders) a thing of the past. The fact of the matter is most successful individual traders in today's market understand and trade options in some form or another. The beauty of stock options is they can do anything a stock can do much at a much cheaper cost and a better ROI.

Options have a negative connotation simple because they're misunderstood. Options strategies are much safer than stock trading, the key is in being properly educated in options. There are many types of investment vehicles out there. Options happen to be (in my opinion) the best for the individual investor.

Here's the other great thing about trading options: option trading strategies are extraordinarily flexible. You're able to capitalize in and profit with options in various ways.The only way to make money with stock trading is if you pick the right direciton of the market movement. With stock trading you can only make money when the market is going up or going down.

With options you make money whether the market goes up, down or stands still. The premium collection aspect of a spread trade, for example, allows you to make money whether the market moves in your diretion or stands still. You can make money when volatility increases (VIX) by "playing volatility".

If you happend to have a directional trade on and the stock goes against your position, the power of options allows you to instantaneously adjust your position by "morphing", an advance adjustment strategy. Keep in mind this is on a move that went against your initial position.

Now let me clarify, options are not quite as easy to learn as stocks. It is true that learning to tade options can be a lot of work but it's absolutely worth it if you can have profiable months...month after month. Learn to trade options and learn from people who actually trade the markets.

The fact is, option trading is more profitable than stock trading. It's also safer and more maneuverable. You can even trade options in the forex market if you like curency trading.

I've learned how to trade a variety of invesment vehicles over the years. They all have their own unique rythm and are very similar yet very different. Of the many forms of trading the markets, it's the options tradings strategies that have proved to be most profitable over the long haul.

Article Source: http://www.articlesbase.com/finance-articles/why-options-trading-is-better-than-stock-trading-3455209.html

About the Author

I've spent over $10,000 in my options trading education and have spent thousands more in the school of hard knocks (real life trading). There are some great courses and there are some bad courses out there but the Best