Is it a bad idea to deal in options without ever having invested in stocks?

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H2Oskier

Is it a bad idea to deal in options without ever having invested in stocks?

ffsotus

It depends. If you use naked options then I would say yes. There are ways to use options and limit your losses. I would pick up a book and make sure you learn about option. Perosnally i would stay away from them. Options were invested as a form of insurance, to protect your investment.

cmac

Check out investopedia.com and paper trade, read the tutorials then if you do well you will have to find a brokerage that will let you trade, you have to be approved first.
Good luck...

xcalibus

Stock options are derivatives, meaning they derive value from stocks so a fundamental understanding of what affects stock prices is needed before attempting to trade options.

myfemax

very bad. get acquainted with stock first and the move on to derivatives or stay with stocks

CulturedQuant

The bottom line is you should know the direction of the stock prices. It doesn't matter if you have invested in the stocks or not. You should feel that a high probability that stock price will move on your favor

Nitin G

Not exactly.

If you really know what the "options" are and how the money part changes with the changing rates of the base on which the options are derived from.

But yes, it is very difficult to immediately assess the monetary impact of dealing in the options. If you are buying the options (calls or puts- depending upon your perceived future lookout of the stock prices), it can be calculated as the maximum loss that you may suffer, if the base stock prices do not change in the directions you have percieved.

I suggest you read and study about the implications of investing through options a lot.
Best of luck.

Marti M

Yes.

vetech_61

yes, you will lose all

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