64 Options as Leverage

This video explains how options can amplify investment returns, but also details the significant risks involved. Using a practical example, we compare buying a stock directly versus using call options with the same initial capital. Discover how call options can turn a 20% stock return into a 300% return in an upside scenario. Conversely, understand how the same options can lead to a 100% loss of investment when the stock price falls. Learn why options have a non-linear payoff structure and the inherent dangers of using them as leverage. Visit AxiomTutoring.com for more educational resources, and subscribe to @AxiomTutoringCourses for future videos!