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Why buy call options? Why not just buy and hold equities?
by nprz 5y ago
Why buy call options? Why not just buy and hold equities?
- fdgsdfogijq 5y agoWhy settle for 20% returns when you can get 500% returns? Only the lower classes are so risk averse. The rich understand that QE essentially strips risk from the markets
- short_sells_poo 5y agoYou can do the same with levered ETFs or futures, if you want to be levered to the hilt, at least do it with instruments where you don't run the risk of ending up losing everything even if the equities go up.
- ed25519FUUU 5y agoBecause call options are a form of financial leverage, which is how the rich are getting much richer as the fed prints money
- short_sells_poo 5y agoCall options are a rubbish way to do this, please don't spread this misinformation. If you want leverage, just buy the futures. If you are thinking about punting your entire income into options on single stocks, and don't know what you are doing, just stop right there. You can easily lose everything even in a bull market.
- deleted 5y ago[deleted]
- Der_Einzige 5y agoYeah, that's kind of my thought here too. It honestly feels like the only reliable way to make huge stacks of money with calls/puts is knowing stuff that ought to qualify you as an "inside trader".
- pcbro141 5y agoI bought AMD Jan 2023 $90 options for $13 earlier in the year when AMD was trading ~$80. So the breakeven price is $103 by Jan 2023 which I found not very risky looking at the accelerating EPS growth. Look how much I'm up by buying close to the money options instead of buying shares at $80: https://i.imgur.com/vYHl1LY.png https://i.imgur.com/vYHl1LY.png