Hey guys, I’ve been looking through this subreddit and it looks like a lot of you trade call and put options on stocks instead of the actual stock equity itself.
I’ve read a few books on stock options trading when I considered doing it (not considering anymore) and it always surprised me why people would do it because it seems way more risky, and more importantly, much much more difficult. In stock options you often have to deal with not just the risk of the stock’s price move, but also implied volatility, time decay and delta. And on top of that, you risk losing the entire premium paid for the option if the stock’s price doesn’t go over/under your strike price, and these premiums can get very expensive if you lose a couple of bets in a row.
Obviously there’s multiple different ways you could combine these options to lower or amplify your risk, but to me that just gives more points of risk/failure of losing your investment if you don’t consider and do the proper DD.
This is not to say people shouldn’t trade options, I’m just not smart enough to trade them profitably. But for those of you who do trade options, how profitable has it been for you and how much more difficult is it than simply trading stock equity (and is the increased difficulty worth it?).