Here is a strategy on how to control the amount of stock you want for half the price. Its called deep in the money options and if you use it the right way, I highly recommend it. The problem investors have with options is that they nearly always go for the cheap options which are always out the money. For example just say your stock is trading at $25. You can buy a call option out the money (otm) for $30 (strike price). Investors are attracted to these out the money options because the price of them is cheap. For example, maybe you can buy a $30call for $2. This means you can control 100 shares of x for $200 instead of buying the shares for $2500. So Whats the catch?. Well the catch is that you only have the chance to buy the shares for $30 if they are trading above that strike price at option expiration time. Then yes if they are trading at $35, well then yes you can buy them for $30 and sell them for whatever their price is on the open market.
Investors are attracted to this because the options are so cheap and you get to control alot of stock for little money. The thing you have to remember is that you are really buying nothing tangible, i;e, it has no real value. Your option will only become valuable if the stock in question trades above your strike price. Then and only then will your out the money call option become profitable. Investors are attracted to the very high return of investment but they too often ignore the risk. Let me show you how I use options.
I use deep in the money call options. I go as deep as I can, usually where the strike price is half the value of the underlying stock or commodity. I wrote a detailed article on this subject. You can read it in full here..
How To Trade Options The Right Way
