Why Options Trading Is a Bad Idea(blog.trystrikes.com)
blog.trystrikes.com
Why Options Trading Is a Bad Idea
https://blog.trystrikes.com/why-is-options-trading-a-bad-idea-a35a2e613063
3 comments
When you think a stock such GameStop is absurdly valued but don't want to take the risk of unlimited losses by shorting, buying a put can be considered, but only if you are willing to lose the amount invested in the put. Even if you are right that a stock is overvalued, it may not fall below the strike price before expiration. For speculative long positions I suggest buying stock instead of call options.
Absolutely, some hedge funds have learnt a painful lesson of a so-called short squeeze..
Put options can also be quite expensive but risk-wise way more attractive than shorting the stock.. To make options position less costly (but also inevitably give up some upside) put bear spreads could be considered: buying 1 put option and short-selling another put option with a lower strike.
Put options can also be quite expensive but risk-wise way more attractive than shorting the stock.. To make options position less costly (but also inevitably give up some upside) put bear spreads could be considered: buying 1 put option and short-selling another put option with a lower strike.
It all depends on your investment horizon.