When it comes to investing, many people are familiar with stocks, bonds and mutual funds. However, there is another investment instrument that is often overlooked – options. Options are a type of financial derivative that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a set price at a specific time.

One of the main advantages of options is their versatility. They can be used for speculative purposes, such as betting on a stock’s price increase or decrease, but they can also be used for portfolio hedging and risk management. Options can also be traded with more flexibility, allowing investors to profit from market movements without having to directly own the underlying asset.

However, it is important to note that options trading can be complex and risky, especially for beginners. It is important to thoroughly research and understand the underlying asset and the risks involved before investing in options.

Overall, options can be a valuable addition to an investment portfolio for experienced investors who are willing to take on the risks and utilize them effectively.