tasty Extras

Stock or Options | Position Defense

tasty Extras

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

As our comparison between stocks and options as investment vehicles continues, we find ourselves addressing the ability to defend a position gone wrong. Between the two, the differences couldn’t be greater. With stock, if a position goes against you, your only choice (outside of doing nothing or closing the position) is to increase or decrease the size of the position. With options, however, if a position goes against you, there are always several alternatives available to you – most of which actually decrease your overall risk in the position.

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