Options trading is extremely risky, and around 90% of retail option traders lose money in the long run.

Let’s explore why ➡️

1️⃣ Options trading involves significant leverage, where a small investment controls a large position.

While this can potentially amplify gains, it can also magnify losses, potentially wiping out your entire investment in the blink of an eye 💸

2️⃣ Unlike stocks, options expire, and time decay causes the value of an option to decrease as the expiration date gets closer, eroding your investment over time 📉

3️⃣ Options are generally pretty expensive: most option premiums range from a hundred dollars to a few thousand dollars, and there’s no such thing as a fractional option 🍕

4️⃣ Options trading is a zero-sum game, meaning one trader's gain is another trader's loss.

Every dollar you make comes from someone else’s pocket, and vice versa.

In contrast, the stock market is a positive-sum game.

Over the long run, as companies grow their profits and increase in value, everybody benefits and overall wealth increases 🥧

5️⃣ Lastly, in options trading, you’re often betting against high-frequency trading firms, sophisticated Wall Street traders and giant market makers.

These players have access to billions of dollars, the smartest talent in the world, exclusive data and advanced computer algorithms, making it very hard for retail traders to consistently beat them 😔

For example, Citadel Securities is a market maker who executes 25% of all US option volume, and they’re on track to make over $9 BILLION of revenue in 2024 🏳️

Hopefully now that you know the substantial risks of options, you can understand why Bloom does not offer options trading 📱

Unlike some other investment apps, our goal is to help you grow your wealth safely, instead of helping the big guys like Citadel get even richer 🛡