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Are options an option?

NO options nohow – danger for new investors!

Part 1 of 2 White Top View series, The option of options

Options have no place in the portfolio of anyone new to investing. You must master investing basics before you consider looking at or using any derivative.

Options are a type of derivative. Derivatives are financial creations “derived” or based on a real asset. They are bets on a future price for the underlying asset.

Extreme losses can be quickly realised when you get ahead of yourself while learning to invest. Getting into derivatives too soon can be a danger to your wealth.

Financial explosives!

You can quickly cause yourself serious portfolio harm by playing with financial explosives! I am not saying options are bad or to avoid them forever. Just that they are not for beginners.

To build wealth, begin with learning basic investing. First understand the basics of stocks, stock markets, sectors and any specific company that interests you.

The question was posed by a keen new student of investing

Anyone new to investing, let alone trading should not begin by trading options. Options are for trading, not investing. Advanced traders profitably use these financial tools. However, we must learn to walk first.

A clumsy option trade can be a loser from the beginning. Used prematurely or inappropriately, options can also quickly blow up an account.

This exotic explosive stuff must be well understood before handling. Do not explore this extremely risky territory on your own. Qualified guides can be very expensive and hazardous to your financial health.

There are multiple other ways to significantly improve portfolio performance. Learn basic investing possibilities first. Then learn several different strategic approaches before you consider trading or using options. These comments are all directed at beginners.

Next time we will take a brief look at some basic option questions and how to safely learn more.

Have you profitably used options? Let’s talk about it.

Your comments and questions are welcome here. Pay it forward, please share this blog. The bite sized White Top Investor lessons are intended to demystify investing. You can become a knowledgeable confident investor, one small step at a time. Please ask questions, I can help you better understand markets and investing. The White Top Views email list will not be shared or sold.

Have a prosperous day!
White Top Investor
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These discussions and information are intended to help you better understand markets and investing. The White Top Views email list will not be shared or sold. I am not a financial or investment advisor; opinions are for informational and educational purposes only and are not intended as investment advice. Site or blog content can be syndicated, please contact

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