Options Trading: Weapon of Mass Destruction

Options trading tempts many novice investors. While it seems like a quick way to riches, it mostly leads to a complete loss of capital. Most traders have no clue who is on the other side of the trade, and take on risk that they do not understand, based on a feeling or hunch. The only scenario in which options make sense is for hedging, which is not a topic for beginning traders ever !

I could give you many examples of acquaintances who have lost 5-6 figures in a day. More public stories are in this article by The Wall St Journal.

Source: WSJ. Reproduced with permission. All rights belong to their respective owner.