Is Options useful or not in today worlds

Sept. 21, 2012 - PRLog -- A word I often hear when people are discussing options is ‘risky’. The
other evening at dinner, a guest made the same comment. An hour later,
I was sorry to hear him say that he had recently lost 84 per cent of an
investment in stocks in emerging markets.

It is an unfortunate and costly reality that few investors know how to protect
their investments from downside risk. Their sole investment strategy is to
select a stock to buy, or a fund to buy into. Over the long term, and if value
is found at the time of purchase, this strategy makes sense. Unfortunately, it
hasn’t made sense with many stocks from 1999 through 2009.

Of course, a competent financial adviser can outperform the indexes. But
for those who take a more active role in their investments, options offer the
two advantages of flexibility and limited risk.Call and put purchases are excellent ways of developing market aware-ness and building confidence. This is because with these strategies traders can take either a bullish or bearish position while limiting their maximum loss at the outset. Because the cost of options is paid for up front on most
exchanges, the options buyer is forced to be more disciplined than a trader
who must simply post margin. And he won’t be stopped out.

Because options have lives of their own, they are indicators of market sen-
timent. Implied volatility, which we will discuss, often anticipates changes
in price activity in the underlying contracts. Simply knowing about
options can improve market awareness.

Options strategies are only ‘risky’ when, like other investments, their
potential return does not justify the risks taken, or when the parties
involved do not know the fundamentals. This book presents a sensible
approach to profit opportunities with a manageable degree of risk.

More about binary options school: http://binaryoptionsschool.edublogs.org/