Why do I trade options? Because an options trader can consistently make money in any type of market, not just when stocks are going up.
By selling options, I average a 2% monthly return on my account, even when the market is going down, which is 24% per year.
Professional investors expect to make 12% per year if they are doing well.
So why do most people avoid options? One reason is that they have heard options are too risky. Of course, this is not necessarily the case. The truth is that options are so flexible, that a person can control exactly how much risk, and conversely how much potential reward (and probability of getting a reward), they are willing to take on in each trade.
If that’s the case, why do you hear so many scary horror stories about options? It’s because people are greedy; they want to get rich quick. And because of this, many people go for the high-risk, high reward method of trading options . . . . so that’s what they get, high risk.
Also, many people avoid options because they are more complicated than just buying or selling stock. They should only be traded by people willing to put in the time to learn how they work.
I certainly believe they are worth the time and effort to study, and there are many great (free) resources out there with which to do so (Tastytrade.com being one of them).
I plan to post about some of my strategies and trades in the future, so stay tuned!