Options trading has several benefits over stock trading:
- Options allow you to achieve a similar return to shares with less money, so they are a way of limiting your risk within certain limits.
- Options can be a useful strategy if you are an experienced investor. Experienced investors know how to limit their risk, and they understand the risks they are taking when they use a particular options strategy.
- Generate income. Some shareholders sell call options against their stock positions or write put options to generate income. Such strategies can be attractive and relatively low-risk ways to use options.
