Trading stocks vs options. Which would you choose?

stepandfetchit said:
For directional trading: I prefer using options primarily for their leverage.
So, I am not a member of your first "We .."!
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Cool. :thumbsup:

I have many "we" relatives, some love convexity some love leverage, some love straight, some love vol...
 
So you like selling OTM options??

That's the edge??


BlacknBlue said:
It favors those who can do math. Simply, if you want to buy a stock now/soon why not write an ITM put. If you want to sell a stock now/soon why not write an ITM call.
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The cold truth is that options are to american investors what CFDs are to the rest of the world.

Convexity, stochastics, arbitrage, IV, etc.... are all for the birds really.
 
taowave said:
So you like selling OTM options??

That's the edge??
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I can't go into detail but here is what I do:
covered combination
variable ratio write
short strangle

my preferences change depending on volatility, market cycle, and market news.
 
Thanks...My main point is by suggesting to sell a deep put over buying stock,all you are doing is synthetically going short the call. Perhaps if vol is high,its well worth it,but I dont think there is any edge to shorting deep puts over buying stock..With that said,I will backtest it:)
 
The way you worded the question,Stock vs Option/Put Spread gave me the impression you were trading directionally and put spreads were your go to position for Deltas..

In that case I would probably choose to trade the stock over a putspread.. Liquidity/Bid offer,Skew are the main reasons.

However,I would trade vol over direction every day of the week,but I don't think that is what you are asking
 
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