Options for Beginners — Part 1: Options Vs Stocks — Which Is Better?

Markus
7 min readMay 11, 2021

Markus is a self-made multi-millionaire who was born in Germany. He came to the US in 2002 with $30,000 in his pocket and a dream to become a successful trader.

Over the past 20 years, he traded and invested his way to success in the stock and real estate market, making millions of dollars in the process.

Markus has written three best-selling books about trading and investing that have been translated into multiple languages. His youtube channel with over 4 million views is dedicated to his favorite topic — which is trading stocks and options.

He lives in Austin, TX where he enjoys spending time on the lake watching his kids racing their sailboats.

iqoncept via depositphotos.com

If you are wondering whether to trade options vs stocks, then this article is for you. There’s no simple answer to that question because it depends on how much money you have and your risk tolerance level.

This blog post will cover the 7 topics that you need to know to answer the question “Is Options Trading Better Than Stocks?”

1. What Is The Difference Between Buying Stocks and Buying Options?

Let’s keep it simple:

When you buy a stock, then you own a share of the company and get paid dividends.

Buying options, on the other hand, means that you only have the right to buy or sell a stock at a specific price before the option expires. But you don’t own the stock (yet).

As you will see in a few moments, options trading requires much less capital than buying a stock, and therefore it’s very attractive.

But it can also very confusing. My goal is to make it simple for you.

Let’s start with an example:

2. Which Is Better: To Buy A Call Option On A Stock Or To Buy A Stock?

Let’s use Apple (AAPL) as an example. Right now, the market price of AAPL is 128.70.

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Markus

Markus is a self-made multi-millionaire who was born in Germany. He came to the US in 2002 with $30,000 in his pocket and a dream to become a successful trader.