5 reasons why people stay away from options trading

5 reasons why people stay away from options trading 

Options trading has been quite popular, many of the top financial institutions, but it does not always include private investors enjoy the same kind of popularity. 

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So today I thought I would look at some of the reasons people tend to stay away from options trading, foreign exchange trading or stock, rather than investment market, rather than choice. 

1. Lack of funds 

Why do people avoid one of the main options trading because you usually need a decent amount of capital behind you to start trading in these markets. Although you can easily start trading the Forex Market, for example, with less than $ 500, you really can not do the same options trading. 

2. Too complicated 

The biggest reason, in my opinion, why most traders do not consider options trading because they do not understand them. I can definitely relate to this, because these are extremely complex instruments. It is quite difficult, but learning the basics, but try to learn how to make consistent profits equally challenging. 

3. Not suitable for short-term trading 

Many people do not want to buy a few weeks or months of long-term or options trading, stocks down the line. Instead, they prefer to trade the foreign exchange market, for example, which is more suitable for short-term trading. This is understandable, because although it is possible to day trade options, it is very difficult because of wide spread money. 

4. Taxable profits 

Of course, different countries' national laws, but it is often generated from options trading case of any profits are completely tax, which immediately makes this form of trading less appealing. 

5. High volatility 

It is very common for people to bear less risk because they grew up, in order to keep their savings, rather than risk losing the money. Because the options market is very volatile, it is normal people turn to stocks or bonds instead. 

I hope you can understand some of the reasons why you do not see a lot of individual traders and investors turned to options trading as a means to make some extra money. For many of these markets is simply too difficult to understand, the other more, they are just too scary. 

However, if you can get your head around how they actually work, but also provides some great rewards, and there may be some big gains.