Has anyone moved from stocks to options altogether?

Discussion in 'Options' started by a529612, Sep 17, 2006.

  1. Just sold my last share of stock and I don't think I'll buy another stock again after playing with options. IMHO, stock is a lot riskier than options. How about you?
  2. After options you can take a look at futures.

    That was my path Stocks > Options > Futures

    I guess that could be an natural progression as you become a better trader you look for better ways to leverage your money and time.

    Good luck with options!
  3. MACD


    If you can accurately predict direction then trading the underlying may be better (depending on the strategy utilized). By that I mean all trading requires "directional" predictions. Even the decision for trading "range-bound" markets requires a directional bias -- that is range-bound is a direction. So direction considerations are necessary even when using "direction-less" option strategies.

    Of course, whether you trade stocks, futures or options you must predict direction. Options provide some additional leverage and margin requirements can be controlled.

    I question why one would say that as one "becomes a better trader" they would move to trading futures. Not sure why that would be true.
  4. Ditto..

    Stocks ---> Options -----> Options & Futures


  5. Prevail

    Prevail Guest

    trading the underlying directionally is the least cost intensive as well as the cleanest.
  6. True stocks are cheaper to trade directly but option costs are pretty low nowadays. So are futures.

    Also with options, a trader can look among 25 or so different strategies to find an approach that fits their trading style, risk tolerance and risk/trade management abilities (assuming they take the time to do so lol). With stocks, for me, it is either buy or sell and while it works for a lot of investors in picking stocks, I like the greater flexibility of options :).

    But bottom line, someone great with picking stocks might be better sticking with just that since one should never trade outside their comfort zone or area of expertise. One product is not better than the other per se, it may just be better for that specific individual.

  7. I like options, but in-general I believe a lot more money is lost trading options than stocks.

    There are many reasons that more money is lost on options, but a big reason is that options are a zero sum game. For someone to win on options someone else must lose. Stocks, on the other hand, have a pyramid scheme advantage. That is, theoretically everyone can win. Although in practice, of course, not everyone wins, but over time most people probably win. (until the ultimate collapse coming someday).

    There are many more risks with options that I have not mentioned, but I still trade mostly options because of the flexibility they offer.

  8. ktm


    Same here.
  9. My opinion MACD is that with futures your money is leveraged (more than stocks for sure) and allows you to see greater returns (assuming you are correct in your trading of course). You could either trade more contracts and see substantial moves or trade less contracts and see the same moves as trading stocks. To me, trading stocks is too capital intensive. I've never traded prop and understand the leverage is greater there, but outside of prop you are going to get 2 to 1 or 4 to 1 leverage at best? Compare that to trading futures and if you 'max' out your futures account, you can trade substantially more and gain substantially more OR just trade less contracts (and have less capital tied up) and see the same gains as a stock trader.

    Just my opinion.
  10. frank99


    I moved from Stocks to Options also.

    There are certain strategies with Options that can be extremely risky, but you can select more conservative strategies with options as well (which is what I do now).


    #10     Sep 19, 2006