Ritika Dubey, The Canadian PressChris Thom, CEO and portfolio manager at Moat Financial, joins BNN Bloomberg to discuss options investing amid market volatility.
Social media and online commentary have pushed demand for options trading, said Josh Sheluk, portfolio manager at Verecan Capital Management. For example, if an individual stock is trading at $50 per share, an investor can buy a call option for $55 — predicting the stock will go up five dollars within a period of time, Sheluk said.
“The pricing and cost of options trading has come down quite significantly over the years,” said Sheluk. “These digital-only platforms have made it much more cost-effective.” Bilaal Dhalech, a finance content creator and self-taught options trader, suggests investors educate themselves and learn about the risks.“There’s still risk,” he said. “But for most people, that risk is not a lot because it is not a lot of money.”
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