FUQI COMPARISON @ :
600 shares bought @ $20.60 = $12,360.00
6 Feb $21/CALLS bought @ $1.65 = $990.00
Options have 92% less money risked
Prices for 1/8/10
Stock closed @ $21.66 for $12,996.00 (+5.16%)
$12,996 - $12,360 = $636.00 in profit
Options closed @ $2.10 for $1,260.00(+27.27%)
$1,260 - $990 = $270.00 in profits
Although Options have a higher % gainer, currently we see the straight stock trade making more in $ profits. One way options could easily out perform is by buying more contracts. This would increase our risk but would also increase our rewards.
I still stand by options strictly because as we clearly see in this example, we risk less, 92% less, than the straight stock trade. This is also why I tell people that only a portion of one's portfolio should be used for trading options.
Have a great weekend.
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