It really depends on how you use them. My favourite strategy is to identify a stock I want to own, enter the market by writing a put at a price I want to own the stock at, and then if executed (and the stock price hasn't crashed), write covered calls at an inflated strike price. If the price goes down you can buy back your call and lock in your return, and write another call. I only do this on European style options to limit risk.
Assuming your stock selection criteria is sound, you can make money when the market is moving sideways or going up. When markets are down you wait it out. If your stock selection was sound, your stocks will recover when market sentiment becomes rational.
Having said this, you have to stick to the trading plan. You need to know when your trade assumptions are wrong and what to do prior to having to deal with a trade that goes against you.
That's the reason why it's "hard" and people loose money... it's not options per se, it's the personalities that trade them that are the problem.
No, but I will. Thanks for the recommendation! Currently I'm reading Mark Jeavons -
The Equity Edge: A complete guide to building wealth through the stock market. It so far has helped me improve my stock selection.
Assuming your stock selection criteria is sound, you can make money when the market is moving sideways or going up. When markets are down you wait it out. If your stock selection was sound, your stocks will recover when market sentiment becomes rational.
Having said this, you have to stick to the trading plan. You need to know when your trade assumptions are wrong and what to do prior to having to deal with a trade that goes against you.
That's the reason why it's "hard" and people loose money... it's not options per se, it's the personalities that trade them that are the problem.
Correlation is not causation.