Replacing Traditional Options With Synthetic Options

Option trading can be very liberating for individual traders. Options offer traders the opportunity to have unlimited profit potential with limited risk. No matter who you are, small trader or money manager, if you can limit your risk up front it becomes more comfortable to take the risk. Options have the ability to provide a high level of comfort. There is simply no misunderstanding what you are getting into when you purchase an option. If you invest $400 to purchase a call or a put, your risk is limited to the $400-no more than that, but possibly less if you sell the option early. This is not the case when it comes to all investment products.