Stocks vs Options

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Purepowerpicks.com provided a good summary of stocks and options in the following link:


Difference between options and stocks by purepowerpicks.com

What stood out for me are the following points:
  • I prefer stocks as I am own part of the business (albeit a very small one for the stocks I own).  It is not just another stock but we need to understand that we are investing in a business, a "living" asset.  My votes can help to move the business in the right direction.
  • There are no expiration dates coming to stocks
  • There is no premium price for stocks - this is not to be confused with the trading fee and commission we pay for each stock position.
An option premium is the current market price of an option contract. It is thus the income received by the seller (writer) of an option contract to another party. 
  • Trading or pre and post-market are not available for options.  Using the selected brokers, we can buy or exit a position in pre or post-market.
  • As a shareholder, I can receive dividends.
 
My investing muse

Timing the market is folly - Nick Murray
Personally, I have yet to find sustained success in stock investing.  The money that I invest through the purchase of the stocks goes directly to "helping" the business.  For options, the money does not help the business or its causes unless we exercise the option to own shares.  In my opinion, trading options with an expiry makes it simply more challenging, with less odds to my favor.

We say "time in the market is more important than timing the market".  Wouldn't this discount "Options" whose success depends solely on timing the market?  This does not mean that trading options is bad, it is just not for me. 
 
We invest in things that we understand.  There is always money to be made (or lost) in every asset class.  For me, I do not know or understand "Options" as an asset class adequately.  Thus, it will be more speculative in nature should I invest in "Options" The first rule of investing is not to lose money. 

There will be times we fail despite our best efforts.  Black swans such as Covid19 pandemic and Ukraine war flew by and disregarded our fundamental or technical analysis.  In conclusion, let us do our best to understand (and research) so that we have the best odds to succeed in our investments. 

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