Tom Sosnoff, the co-founder of Thinkorswim and Tastytrade, is a longtime advocate of options trading.
One feature of options is they allow you to trade costly underlying securities with a fraction of the money.
Sosnoff says an options trader can get that same exposure for as little as $250.
However, Sosnoff prefers a riskier trade that he says is more capital-efficient — one he considers the simplest option strategy with the highest probability of profit.
The value of a car — or an option's underlying security, like a stock — could, in theory, go to zero, leaving the investor holding the bag.
Persons:
Tom Sosnoff, Thinkorswim, Sosnoff, doesn't, let's, Kris Sidial, John McGinn, McGinn, Sidial
Organizations:
Netflix, bullish, Investments