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Why Stocks Can Be Riskier Than Options Simplified Version / Comprehensive Version


Why Stocks Riskier Than Options : Leverage
You risk lesser amount of money to control the same amount of stocks when option trading.


Why Stocks Riskier Than Options : Short Selling
A short seller risks unlimited loss and margin problems when trading stocks but an option trader only risk the price of a put option to profit from the same down move.


Why Stocks Riskier Than Options : Single Directional
Stock trading is single directional while option trading can be multi-directional.


Why Stocks Riskier Than Options : No Hedge
Stock options can hedge against itself and stocks but stocks can only be diversified.



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