What Are Options

Options give you additional possibilities with what you can do with stocks – resulting in squeezing out more profit from them or reducing your risk.

$This detailed comparative chart highlights the structural differences between traditional stock investing and the versatile strategies available in options trading. It illustrates the critical decisions investors must make regarding risk tolerance and capital efficiency. The visual explains that while buying stocks requires paying the full market value, utilizing options contracts allows a buyer to control the same number of shares for a fraction of the cost, thereby significantly amplifying profit potential. The graphic breaks down various scenarios, such as using call options for leverage or purchasing put options as insurance to protect a portfolio against unforeseen losses. By paying a specific premium, the option holder secures the right to exercise the trade at a set strike price, creating flexible paths to generate income even when the market is sideways. Ultimately, this diagram emphasizes the distinct opportunities options provide for limiting downside exposure while maximizing gains through active position management.$
What Are Options? A Beginner’s Guide to Options Trading
Last updated: November 18, 2025
Why Trade Options? 5 advantages over buying stocks
Last updated: December 5, 2025
Options vs Stocks: What Makes Them Different?
Last updated: December 5, 2025