Option price
Do investors buy options more so to make money on the price change of the actual option, or more so for the actual function of the option? I guess it would depend on your investment objectives?
Answers
951 points
Grudun answered one year ago …
It really depends on your investment strategy and the stock.
If you own a stock that is not going to increase significantly in price in the short term and you want to increase your yield you may want to sell covered calls.
If you want to protect a stock that might have a huge drop(say like during earnings) you may want to buy a put option to protect your investment.
If you think a stock is going to have a huge jump but don't know which direction you may want to buy a straddle position(both a put and call) so you can profit regardless of the direction.
There are many many more strategies but it really depends on the individual investors objectives.
