Today I received a newsletter note from Teddi Knight from fullyinformed.com and her notes on the market outlook were so great and expressing my point of view, that I decided to re-post it here for my readers.
Her opinion (as an experienced trader) is what I believe in myself and what I try to stress to my friends when we talk about options and when they immediately tell me after I tell them what I do, that options are risky.
My answer is: “Yes, they are risky, if you have no clue what are you doing and trade them. Otherwise they are safer than stocks.”
My emphasis added:
My outlook for today was for weakness but still a slightly positive close. That obviously is not going to happen…
Meanwhile to help calm some nervousness I wrote this article on Understanding Investing In Stocks. Most investors are trapped by the emotion of stock investing. They have read books, taken courses, joined various websites but still end up with losses or substandard profits. They know they could do better but can’t figure out how. This article is open to all investors. It explains how to understand the small size of the stock markets in general and how to approach everything from stock selection to the role options play in protecting and boosting portfolios. When financial planners and brokers advise investors that “options are too risky”, they truly do not understand the stock market at all. It is not options that are “too risky” but stocks. Stocks in general are “risky” and options are what assists in controlling some of the risk of investing in stocks.
If you want to read the whole article, go to Teddi’s blog and read Understanding Investing In Stocks
It is worth reading.
Once you are done, you will stay calm…
Happy trading & investing.
All depends on the type of option really. Advisers and planners dont like options for their clients because it actually involves work. lol lazy bastards!
Good Day and Grind On!
LOL, you are right. It is an active management asset and they want to sell you something, get commission and run away… Options are not the one for them :)