Traders Toolbox: Learning Options Part 2 of 4 Revisited...

Trader's Toolbox

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"Many people like options because they believe them to be less risky than futures. Options sometimes offer reduced risk, but usually at the cost of reduced profit potential.

One drawback of options is that a trader must consider market speed (volatility) as well as direction. Traders who buy or sell options outright to profit from up or down moves in the underlying market can find themselves fighting an uphill battle against volatility and time decay. With futures, if you’re right about market direction, you’ll win. With options, you can be right about the market and still lose...."

Revisit the Trader's Toolbox Post: "Learning Options Part 2 of 4" here.