The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “How many shares of stock should you buy?” I’ll give you my honest opinion on this and I think the answer is zero. I do not think that you should generally use stock unless you're forced to use stock in your account. Now, this is my opinion on this and I think that stock is incredibly inefficient and also requires a lot of capital. What I think you should do instead is I think you should use options to trade stocks synthetically. And so, what I mean by this is that if you are absolutely bent on owning underlying shares of a particular company, why not just trade these synthetic equivalent of long stock which would be to buy an at the money call and sell an at the money put and by doing that, you basically trade the synthetic equivalent of what would be a long stock position, but the requirement for capital would be considerably less to do this. Now, if you’re in an IRA or a re