Are options trading better than spreads?

Asked 3 years ago

Which trading strategy is better, safer, and cheaper: Options or spreads? What have you found to works best?

Spread Trgovanje opcijama Saveti za trgovanje

Andia Rispah Igobwa

Monday, August 16, 2021

Option trading is better than spreads because it offers unlimited profit potential and can be cheaper in some cases. On the other hand, a spread is a limited strategy with predetermined gains regardless of how much the stock moves. 
With options, you can make money no matter which direction the stock goes—up or down—so long as you buy a covered option that has cost less than it will eventually make. 
The only risk with an option trade is that if your intuition turns out to be wrong and the price ends up going even further in either direction than you thought, then your losses are potentially limitless; but at least with an agreed financial limit that's predetermined and born by both parties from the beginning, therefore avoiding extraneous risks such as margin calls.