While I do actively manage my personal investment portfolio, I still consider myself to be a fairly green investor. I own just a few individual stocks that I’ve held long positions in. Most of my money is invested in about 15 mutual funds. One aspect of trading that I’ve always been curious about, but never actually tried was options trading. I understand the mechanics of options but I never understood if, when and how I should be utilizing this form of trading.

A college buddy of mine, Kevin Chou, recently launched FinanceHuddle where he discusses his investment strategy and his own trading activities. I asked Kevin if he could summarize options trading and contrast it with buying/shorting stocks. He graciously did so in his latest post, Using Options - The Good, the Bad, and the Ugly. I had to read it a couple times over to fully digest what he wrote, but having done so I feel like I have a much better understanding of options trading. Thanks Kevin!