Stock trading is very risky and there is no one person who can completely know where each, and ever, market is going to go. It is impossible to tell. If someone were able to do so, they would be the richest person alive by far and it is not even close. However, there are some indicators where you can make some educated guesses. With that being said, option trading is a good way to hedge your risk.
- Getting involved into the stock market requires a lot of hard work and research to be successful.
- Hedging the risk you have on one particular position can be really useful for yourself.
- There is no one way to describe certain forms of trading as “better” than another type.
“Options also have a timing component or time value and expire on a given date, whereas stocks do not. This time value is an additional fee, if you will, associated with the time to expiration for the option.”