The Traderszone Network

Published in TZ Latest News 16 August, 2017 by The TZ Newswire Staff

Trading options vs underlying

Ignoring leverage, is there any reason to trade options rather than the underlying?

Let’s say I’m bullish on a stock and think the price distribution in 3M will be different from normal (biased to the upside). Textbook tells us that option prices only need depend on risk neutral probability and not on my view since market makers can hedge accordingly. Should I bother buying a call?