Most stock brokers and investment advisors agreed that options are risky investments, but not able to fully identify the risks and rewards of these securities. This article will attempt to give investors a quick overview of options’ disadvantage.

Majority of the trading population lost their investment in holding option contracts, and allowing them to expire worthless. The disadvantage is the life span of an option. Most traders or speculators desire to exploit options’ high leverage return with minimal investment. Option pricing compose of two parts: intrinsic value and time value. These securities are priced for specific performance.

Does it mean we can not make money with option trading? No. Indeed, there are many option strategies for different investors. Please contact us at info@hlcm.us for more information.