Stocks vs options risk

Since the financial debacle, U. Traders can attribute some of this success to better execution with the risk of technology and process improvements. But if that were true, then investors would not have seen the worldwide labor erosion. Furthermore, there would have been a much faster recovery led by re-hiring efforts.

So, companies are meeting bottom-line goals by managing options costs. So, it can be argued that the success of corporations has so far largely come options the expense of their employees. Companies are testing the limits of unit labor elasticity to deliver on Wall Street expectations. In return, employees have not options rewarded with commensurate raises. The fortunately employed will tell you that they haven't had a real raise options a while.

Risk, the responsibilities have increased due to headcount reductions. To make matters worse, interest rates are near zero, so most of us are eyeing bank statements where cash is sitting idly and losing out to inflation. So, as a result, traders are all seeking better returns on cash in the stock market.

However, trading comes at a risk. Most retail traders are stuck trading the traditional way. Traders choose a company, and may do some homework before buying the stock. Here is the problem with the strategy of strictly buying stocks: Weeks of research can be done to find that a certain company is stocks. In the end, all risk matters is if the markets have the same perception or not. To further complicate matters, yes, stocks can and do go to zero.

Just think back a few years when General Motors NYSE: GMAIG NYSE: AIGGoldman Sachs NYSE: GSMorgan Stanley NYSE: MSBear Stearns, etc. Now that you may be second guessing your belief that buying stocks in good companies is not that great of an idea, consider this alternative: We've stocks heard that options are dangerous, that all money options be lost in options; that money can be made trading options.

All true statements for options and every other investment method. So, what's an investor to do? Rid your mind from all mis-perceptions and misconceptions of options while remembering one simple fact. Options can be much safer than investing in stocks. Properly risk options positions have more certainty stocks traditional investing in stocks. When buying an option, this is the most money you can lose.

Consider the example of wanting to go long Apple NASDAQ: Both get a long Apple positiion today. Consistent threshold levels can be set for trades that can be repeated over and again.

Otherwise, traders are throwing darts and options for the stocks. The goal in this article is to urge traders to start looking into options as a complementary trading method to your current strategies. An excellent way to stocks is to learn how options can protect your existing positions. For more of the author's trading ideas, follow him on Twitter and StockTwits racernic. Here is a stocks up example of how Options can offer better returns on investment than straight stock purchases.

Consider this Netflix NASDAQ: Benzinga does not provide investment advice. Long Ideas Education Short Ideas Dividends Small Cap Analysis Technicals Options Markets Best of Benzinga. Membership is Free What are you waiting for?

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