Options are powerful because they can enhance an individual’s portfolio. They do this through added income, protection, and even leverage. Depending on the situation, there is usually an option scenario appropriate for an investor’s goal. A popular example would be using options as an effective hedge against a declining stock market to limit downside losses. Options can also be used to generate recurring income. Additionally, they are often used for speculative purposes such as wagering on the direction of a stock.
If you know how options work, and how to use them appropriately, you can have a real advantage in the market. Most importantly, options can allow you to put the odds in your favor. If using options for speculation doesn't fit your style, no problem – you can use options without speculating. Even if you decide never to use options, it is still important to understand how companies you invest in use them. For instance, they might hedge foreign-exchange risk, or give employees potential stock ownership in the form of stock options. Most multi-national corporations today use options in some form or another.
The challenge most investors find is "what stocks do I trade options on?" Our Option Screener provides insight into finding the best stocks and ETFs to trade options. With over 2500 stocks and over 330,000 options combinations you will have the power to find great trade candidates. You can filter for option trades on covered calls, puts, credit spreads and iron condors.
For more detailed information on the power of our Option Screener please visit this link.