Options are a less well-known aspect of the stock market that traders can use to earn profits. The most amazing thing about options is that you can start getting in on the action by only investing a small sum of money, even $100 or less! And each options contract gives you the right to control 100 shares of stock.
Options trading sounds complicated, but they are actually pretty simple. They were designed to give people the option to buy or sell off stock at a pre-determined, specific price. Options are contracts, and like all other contracts, they come with an expiration date. But the best thing about options is they trade on their own market – just like shares of stock. And when the stock prices change, so does the price of the options contracts.
But for small investors, one of the best things about options is the high return on investment or ROI. As we will see throughout this audiobook, a trader can earn far higher ROI trading options compared to stocks!