Unfortunately, many people who are interested in learning more about the options market are provided with misinformation from friends, colleagues, online blogs, and even articles posted online.
One of the most common aspects of this misinformation is that options trading is a high-risk type of activity that is very similar to gambling. The reality could not be further from the truth, with experienced options traders and investors carefully choosing the contracts they buy or sell based on the movement of the market.
Part of the reason that options trading is often called a form of gambling is the lack of understanding and education most people have when getting into the market. Without experience and support, it is more common to make poor selections of options and to fail to understand the research, market study, and the ongoing trade analysis that is the basis of the selection used by all successful options traders.
The Difference Between Gambling and Options Trading
Most people define gambling as playing a game of chance, where there is a chance of winning and a chance of losing, but there is a limited ability for the player to influence the results due to the inherent uncertainty of the outcome.
Options trading does have some level of uncertainty as does any investment opportunity, but there is a very significant role for the investor to take in options trading. Understanding the market and where to set buy and sell points based on the past performance of the option as well as the market is not random or chance when approached from a structured, analysis, and investment focus.
The use of market analysis in options trading, combined with years of experience with top options trading advisors, allows investors to choose their options and to know when to call or put to optimize their financial gains. When investors equate options trading to gambling, it is more a factor of their lack of knowledge than a reality of the potential this type of investment offers.
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