It’s very important that investors learn how to trade options before getting sucked into dreams of easy money. With casual investors becoming more and more interested in options trading, there are many brokerage firms happy to real you in with claims of massive profits. Although it is possible to make incredible profits from options trading, doing your homework and investing wisely is essential. In the New York Times article “Growth In Options Trading Helps Brokers But Not Small Investors”, you can read about some of the ways brokerage firms have been taking advantage of small investors.
According the article, companies like Ameritrade have been benefiting from the rise in options trading without passing that profit onto their customers. New investors with little experience have been especially hard hit by shady business practices. As the company remains hesitant to release details about customers’ trading, many former employees are claiming that they did not warn customers about known investment risks until their accounts were almost empty.