Lux Investing

Is Options investing better in bull or bear markets?

Hello everyone. I had a question for anyone who is familiar with investing in options. I've been hearing so much about it lately. Moreso than I did when there was a bull market. My question is...Is investing in options more advantageous in a bear market than it is in a bull market? Or is it the same regardless. Please let me know. Thanks you!

Public Comments

1. Obviously a bull market..come on. lol. You're buying the option to buy shares at todays price later in the future. Would you want to pay them dearer or cheaper? Pretty obvious isn't it? p.s. Invest in bonds...the way the market is going I'm not surprised there'll be another crash. Especially if Iran hits off. Then you wont need a "put" or "call" option...you'll need a miracle. Ignore the investment "experts" on here...
2. Trading in options is suitable for both bear and bull markets. It's an ideal product for investors/traders since it gives the opportunity to make money in both types of markets Here's some sites you should visit for a better understanding of options and their strategies http://www.schaeffer.com/ http://www.options-trading-advice.info/ http://www.optionseducation.org/
3. Options have tons of strategies, you can have a put or call option. Put options are when you believe the market will go down. Call options are when you think the market will go up. Options and derivative securities in general are very complex financial instruments, I recommend someone who is largely unfamiliar with them to not use them. I would do plenty research before even considering purchasing an options contract.
4. In a bear market traders are looking for ways they can make money. Shorting stock is not easy with traditional brokers therefore they turn to other methods. CFDs, spread betting and options. Buying puts and selling calls.
5. There are many "Option Strategies". Some help you make money in bull markets, some help you make money in bear markets, ome help you make money in range bound markets & some help you make money as time passes (theta). https://www.cboe.com/ http://www.redoption.com/ http://www.optionaddict.net/ Most option strategies are "defined risk". Learning Options may take you years..... but it's well worth it. My favorite Option Broker; http://www.thinkorswim.com/
6. The wonderful thing about Options is it gives ways to benefit both in bull markets and break markets (and in dull markets and volatile markets). On the other hand, with stocks, we can only benefit in bull market. A simple strategy such as buying a put (or) selling a call can make you good money. But they are risky and you may lose 100% investment if your prediction about stock movement is wrong. There are more conservative option strategies where your risk is not very high, but your returns are conservative too. For example, a Calendar Put spread ( http://www.optionwin.com/Members/putcreditspread_calender.aspx ) can limit your risk and benefit you in bear markets. Sites such as http://biz.yahoo.com/opt/ have introductory theory on strategies. If you are looking for more advanced analysis, scanning, charting, you could look at sites such as http://www.optionwin.com .