How are options and stocks similar/different?

February 28, 2023 - 2:46 pm EST

They both trade on the same broker platforms. Options are based on underlying stocks but unlike a stock, which you could buy and hold, options require a different approach. Options are contracts and include a time element, similar to ice cubes: they melt over time. The closer they are to expiration, the faster they melt. Profitable options trading requires a clear understanding of risks and rewards.

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