US Stock Options Smash Record - The number of traded contracts surpassed the 10-billion mark in 2022 or the first time evervengeful_toaster t1_j2ahiho wrote
Reply to comment by Derpazoid69 in US Stock Options Smash Record - The number of traded contracts surpassed the 10-billion mark in 2022 or the first time ever by Ok_Significance_4008
Options can be less risky than buying shares.
If I sell a put at 10 dollars and the stock drops from 12 to 9 dollars, then I've acquired the stock at a cost basis of less than if I bought the stock outright at 12 dollars.
RockyattheTop t1_j2ammwr wrote
Except in a bear market if it drops from 12 to 9, it can also drop to like 3 or 2
vengeful_toaster t1_j2an3u5 wrote
But you'd still be down less than if you bought the shares outright thanks to the premium.
With shares you can lose it all if it goes to 0, but if you sell a put you at least will still have the premium.
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