Thread by @team3dstocks

Correct.

If u think a stock is gonna go up (or down) FAST (emphasis on fast), 100% of the time u'll always make more trading the options instead of the stock. while risking less at the same time.

if u're unsure about how fast the move will happen, trading the stock is better.

https://twitter.com/will4mm/status/1398759616058695685

Take a basic $300 stock for example (IV 50%).

u think it'll go up 3% TODAY, & u only want to invest & lose $1K

Trading the stock u'll only make $30 profit on ur $1K.

Trading the option (say 5 days exp, ATM), u'll make at LEAST $600, & that's not even including gamma or theta

god forbid u buy a closer to expiration option. that $1K nets u at LEAST +$1400 profit compared to the $30 profit if u traded the stock. And in both scenarios, ur max investment & max loss was only $1K.

So as u can see, Options are ridiculously lucrative if ur timing is good.

if ur timing is bad, or u dont think the move will be fast enough, then stick to the stock (or do option spreads instead). Else time decay will fuck u sideways

It gets more in depth than this but im trying to keep it simple. Conclusion, options have the best RR

#BearTipOfTheDay

that's why when the SEC catches ppl doing insider trading, 1 of the 1st places they look is the option market (unusual activity). that's b/c when someone (illegally) finds out a big move is about to happen, they dont buy the stock. they buy the options. Far greater returns.