What are your views on Options compared to normal Stocks/Shares ?

Answer 1

You can measure a company's risk in a number of ways, and the stock you buy will mirror that risk.

Warrants and options add a dimension of risk to the underlying stock. Both of them have expiration dates, and if your options expire, you lose the money you paid for the option as well as the right to buy the stock.

The way to get around that is to make sure your option is good for a purchase price that ensures you buy in low, and this most often happens with employee options.

Over the last two years, the SEC has been investigating two kinds of writing options that are fraudulent. Both of them are ways of making sure your option gives you a good price.

Backdating is the most common. It happens when an employee is awarded an option, and the employee shops the right date in the past with the lowest price, and the employee then pretends that THAT was the date they intended to exercise the option.

The other one is called "springboarding". This is when options are awarded in advance of a press release with good news for the corporation. The employee will cash in the option, release the news to the press, and sell when the public has reacted to the press release driving up the price of the stock.

The first is simple fraud, the falsification of the exercise date. The second one is considered insider trading.

Answer 2

First, you need to understand that options are a "zero sum" investment. For every dollar you make on an option, someone else loses a dollar. This is because for every long position there is a corresponding short position. That is not true for stock, and all the stockholders for a company benefit when the stock price goes up. Consequently the average overall return will be greater for stocks than options.

Another big difference is that options expire, so you may not be able to wait out an unusual/unjustified fluctuation in the stock price without taking a loss.

The third major difference is that options trading is at least as much about the volatility of the stock as it is about the direction the stock moves. A lot of people buy call options because they expect a stock to move up but still lose money after the stock goes up because it did not go up enough.

Finally, options allow a much wider range of risk/reward profiles than stocks. You can choose an options spread that is far less risky than simply owning a stock, or a position that is far riskier.

If you take the time and expend the effort to understand how options work I believe you can use them as part of your portfolio to improve the performance of your portfolio. I do not, however, believe they are a necessary part of your portfolio while I believe every portfolio should have some stock holdings.

Answer 3

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Answer 4

Penny stocks are loosely categorized companies with share prices of below $5 and with market caps of under $200 million. They are sometimes referred to as "the slot machines of the equity market" because of the money involved. There may be a good place for penny stocks in the portfolio of an experienced, advanced investor, however, if you follow this guide you will learn the most efficient strategies https://tr.im/4ed13

Answer 5

I have done so before and probably will do so again. No matter how compatible two people are, they are never going to agree on everything. Even if both members of a couple share a common faith, they are likely to still have slightly different interpretations and opinions regarding that faith. It does certainly make it easier if both members of a couple agree on some common fundamental beliefs; It makes it harder if the two beliefs clash in practice. A relationship must be based on openness and mutual respect.

Answer 6

At the moment im trading Bull Put Spreads- it cuts down your loss.

If you want to learn more about starting out in options, I first read Jamie McIntrye's E-Book ( free to download) or his DVD is available for a limited amount of time -free to all Australians and New Zealanders.

Check it out at

http://www.thewealthage.com

Answer 7

Options are more flexible than stocks and have a higher possible rate of return. You just need to make sure you really know what you're doing.

Jeff
http://www.best-stock-trading-systems.com/option_trading_system.html

Answer 8

Read "Options as a Strategic Investment" You will know the answer after that.

It's by McMillen