I just realized that many people still don't fully understand what options are, even though they are a super powerful tool for making money in the financial markets. Today, I want to share what I’ve learned over five years of trading.

Simply put, what are options? They are contracts that give you the right to buy or sell an asset (Bitcoin, stocks, indices...) at a certain price in the future. The cool part is, you only have the right, not the obligation, to do so. Unlike futures, where you must buy/sell regardless of the price.

Real-world example: Back then, I believed Bitcoin would go up to $30,000. I didn’t have enough money to buy directly, so I bought a call option at $28,000. If the price really went up, I made huge profits. If it went down, at most I only lost the premium I paid upfront. That’s why options are called “insurance” for your portfolio.

There are two main types: call (the right to buy) when you believe the price will rise, and put (the right to sell) when you worry the price will fall. I usually use puts when the market is unstable, to protect my stock portfolio. At that time, if the market drops 15%, my portfolio loses value but the put option gains double or triple thanks to leverage.

What’s the advantage of options? You can profit even when the market declines. Additionally, with a small capital, you can control a large position. For example, with $1,000, you can control $100,000 worth of assets. But beware: I’ve also seen many people lose everything by being overconfident.

My favorite strategy is covered call. You hold stocks, then sell a call option at a higher price. If the stock doesn’t rise beyond that level, you earn the premium as extra income, like a dividend. This is how seasoned investors optimize profits in sideways markets.

Currently, Vietnam doesn’t offer stock options trading, only futures on VN30. But if you want to try, many international platforms support it. I recommend choosing platforms regulated by international financial authorities, with good risk management tools.

What are the disadvantages of options? They are quite complex, trading fees can be high, and if you are the seller, the risk can be unlimited. The FTX incident showed that when margin requirements are high, a small volatility can wipe out your account.

My advice: Don’t rush. Start with a demo account, understand how it works, then begin with small capital. Focus on one asset you understand well, develop a clear strategy, and stick to it. The market will always be there, but if you’re not prepared properly, your money can disappear quickly.