“The first thing people need to understand about options is that the market is incredibly efficient”, says Kirk Duplesis from OptionAlpha.com. There is no free lunch, meaning you don’t get anything without giving up something.
Kirk describes buying an option with the analogy of paying for homeowner’s insurance. You pay a premium to cover your house for a specified period of time. This is similar to buying a “put option”, except you win when the option pays out. In other words: You predict the price of a stock, cover the call by paying a premium, and if the price meets the option then you get to buy the stock at the agreed amount.
Joe, Linda, and Miranda discuss the pros and cons of options trading.
About Our Guest:
You can find out more from Kirk Du Plessis at these locations:
Website | https://optionalpha.com
YouTube | https://www.youtube.com/channel/UCQAvjhqp559qSQx2dcg9WVg
Podcast | https://optionalpha.com/podcast
For a quick bio of each of our show participants, head on over to our panelists’ page.