Three main reasons why people trade options. We only need one.

There are three primary reasons why people trade options.

      1.  Gambling

Speculation is the most common reason why people get involved in trading options. Trading, and not buying and holding, is a loser’s game. It is like being in Las Vegas without leaving home.  With trading options, the available leverage is enormous.  At this time, speculative options trading is at an all-time high which is another indicator that the market is about to reverse itself soon.

Monday Morning Program recommends against this sort of activity.

       2. Insurance

Using options appropriately can provide insurance against market losses. Given our investment style, Monday Morning members don’t need it.

        3. Generating extra income

The Monday Morning Program recommends writing (selling) options on a market  index exchange-traded fund (ETF). It is as safe as it is effective.