How to Find Your Own Pot of Gold Trading Stock Options

Many investors consider stock options too complicated to understand, let alone use. Options have a reputation of being both difficult and risky, even among people comfortable with trading stocks. Consequently, many traders who could use options to increase their profits with relatively low risk or trouble are discouraged from doing so.

While it is true that stock options are a unique market in which specialized terminology and strategies are used, these can be learned and mastered readily if the subject is approached in a systematic way. The purpose of this book is to present option information as accessibly as possible, and to facilitate the success of new options traders.

As to the notion that options are risky, it must be understood at the outset that all forms of speculative investment are inherently so. The possibility that money can be lost is something one should never forget. No one ought to trade options without a comprehensive understanding of the potential risks and rewards. The successful trader however, is able to improve the odds in his favor, and make success more likely than failure.

In fact, one of the functions of options is to help quantify and control risk.

In this way they add another tool to the trader's box of tricks and improve his or her ability to generate profits. During my first six months trading stock options, with no prior experience, my account rose from an initial $15,000 to nearly $100,000.