|
As I said earlier in this column, option trading is simply having
more choices in investment strategies. Stock traders buy stocks in a bull
market and sell them in a bear market. In a sideway market, stock traders
simply wait for the market to move in order to make their moves. On the
other hand, option traders have more choices in their investment
strategies in the stock market (*). In a bull market, option traders can
buy calls or sell puts. They can also sell puts in a sideway market. In a
bear market, option traders can sell calls or buy puts. They can also
sell calls in a sideway market. Those who had followed this investment
column should have no problem understanding the points I try to make
here.
To see a better picture of choices, I have included a comparison
chart.
Dennis Phan 潘家墉
17 September 2012
(*) Stock traders buy stock in a
bull market expecting the stock to move higher for a profit. They sell stock in a bear market to
take profit expecting the stock to move lower.
|
