Are options risky?

There is a menacing notion that options are always coupled with high risk. This truly is not the case. In fact, trading with options can be less risky than dealing with regular stocks. One of the biggest advantages to options trading is that you often know in advance how much you could lose if the trade goes awry. The primary difference between stock trading and options trading is that when an investor purchases options, they then have the RIGHT — but not the OBLIGATION — to buy or sell the underlying stock at a given date.

Options are unique in that they do not shut down when the market closes, nor do they require as much financial commitment as stock trading does. Another pivotal point when dealing with options: There is a 100% guarantee that you cannot lose more money than you have invested in the options contract.

While investing always involves risk, our editors and analysts do a fine job at delivering the most up-to-date alerts to you as needed — from buy or sell to expirations. Options tutorials, paper-trading platform reports and video series are resources we provide with our publications as well.

At Agora Financial, we are diligent in citing sources and checking facts. Still, we cannot guarantee that we won’t occasionally print information that is unintentionally inaccurate in some way. You should always double-check any important financial information, such as stock prices or balance sheet facts, before making final decisions. We do our absolute best to never make errors, but we are not responsible for any losses you may suffer as a result of errors.

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