You may be asking yourself the simple question: Why should I be interested in trading options? Here is a list of seven reasons why you should consider investing in options.

1. Options offer potential for huge returns

Options offer you the potential to make a 200% even 400% return on your investment in a matter of days. Though stocks offer good returns, there is no trade in the stock market that offers the potential for such huge percentage returns over short periods of time. Last fall, for example, we have had the pleasure of enjoying option trades that realized an 400%, 800% return on our investment in just eight hours. Most months, we are involved in option trades that bring us 100% 200%, return on our investment. However, with this potential for high returns comes high risk.

2. Options can be profitable even when stocks are going nowhere

While stocks require movement either up or down to make money, options in addition to this can make money when stocks are in a holding pattern or essentially going nowhere in terms of price. When you write an option, stock neutrality can be one of your best friends. So while everyone else is watching paint dry, you can be making money.

3. Options can function as insurance

If you are holding stocks for an extended period of time and are concerned about significant price fluctuations, for a minimal amount of money you can purchase options to offset any potential losses due to price drops. Options can give you the opportunity to reap the rewards of riskier investments, while limiting your losses.

4. Options are a good add on

If you are planning to hold a stock for a number of months or even years, writing options can be an excellent way to add value to your investment without even selling your stock. Of course, you will have to chose the right option, but do it right and you can pocket most of the premiums (Cash) if not all of it.

5. Options are affordable

Another attraction of options is affordability. If you are fully invested in other areas, options can be a way to invest in stocks without having to fork over a lot of cash. At the same time, they limit your losses if the trade goes against you.

6. Options offer flexibility

While stocks can only be purchased at the current market price, options offer a variety of packages based on different Strike prices and expiration dates. Because of this unique feature, one can implement a number of different strategies and tactics to generate income.

7. Options are leverage

When you buy an option contract, you have bought the ability to control 100 stocks. It's a form of leverage and as a result, gives you the potential for significant returns.