Getting Started With Options
Rather than shying away from the complexity of options, stick
with some simple basics in exploiting them.
You can start paper-trading options
despite their daunting
reputation for complexity. If you
succeed on paper, you’ll have
taken the first step to extracting
profits from the real market. It’s
true that there are many kinds of
options, and options terminology
is like a foreign language,
but professional traders use options
for a good reason. We’ll
tell you why.
But first, yes, you can lose 100% of your investment. Of
course, it is theoretically possible to do this by buying a stock,
but it just doesn’t happen. Even if you make an incredibly
poor choice of equities, you (usually) won’t lose all the value
in the next month or two. But it is all too easy to buy an option
one week that will be worthless the next. However, options
can also be conservative, especially when used in conjunction
with equities that you already own.