Why People Trade Options Instead of Stocks — Part1
There are 2 specific advantages option trading has over stock trading.
- The ability to make money in 3 ways
When stock goes up
When stock goes down
When stock stays flat
When you trade/invest in stocks you can only make money if the stock prices go up.
There is no way you can make money if the prices go down or stay flat.
When you trade options instead of stocks, you can participate & make money when the price falls or stays constant. Most of them do not know this.
Remember these 3 strategy names, we will discuss each one in detail over the week
- Upside — Bullish Credit Spread
- Downside — Bearish Credit Spread
- Sideways — Iron Condor
The 2nd reason — we will discuss it tomorrow.