Restricting your Risk When Purchasing Options
One of the key advantages to purchasing options is you can never lose more than what you paid for them. Another big benefit is the amazing leverage that options afford the financier. Naturally, there are drawbacks too. Unless you are deep in the cash, options will only move by a proportion of the base stock’s move. And not only is it necessary to be right on the direction of the stock, you also need to be right on the dimensions of the move and the timing surrounding it.