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

Hey everyone, Kirk here again and welcome back to the daily call. On today’s call, we’re going to answer the question, “Can you just trade options and never stocks?” The simple answer to this is yes. I do believe that you can (moving forward) just trade options and never stocks. The only reason I say that is because options have the ability to give you a synthetic or equivalent stock position without all the capital that’s required to do it. You might hear some clicking in the background, but as I’m doing this right now, I just want to prove the point or give you guys an example of what I’m talking about. To use the broad-based markets which is the S&P, the ticker symbol is SPY, if we wanted to buy stock in the SPY, we could buy it for $245 right now. I’m just rounding up just so that we have some kind of round numbers to work with. That would be actual capital out of your account (if you bought 100 shares of SPY) of $24,500, so $245, 100 shares, $24,500. That’s a lot of money out of your account. In fact