If you've been looking at different ways of making money from the stock market, than at some point you'll come across the idea of options. Many people trade options successfully, and it can be a great way to increase your returns once you have some experience in the stock market. But let's look a little more closely at why people find trading options so profitable.

Firstly, trading options means you access the power of leverage. With a minimal outlay of capital, you can make excellent returns. It's important to remember, however, that leverage can be a double-edged sword. Although leverage ensures that when you get it right you win a big way, it's also true that when you get it wrong, you can lose in a big way too. Leverage works against you in that situation.

Another good thing about trading options is that you can make money no matter what the market is doing, once you become familiar with a variety of option strategies. It doesn't matter whether you feel the market is bullish, bearish or even drifting sideways; there are opportunities to make money with options trading. If you’ve developed your charting skills to the point where you can be reasonably confident about the direction a stock is trending, then there will be an options strategy you can use to cash in on that trend.

Trading options is a great way to generate income even in a flat market. If you're trading stocks, and the market goes flat, there's not a lot you can do except hold on and hope things improve. But with the right option strategy, you can make money from a stock that's going nowhere. Although you can short sell the market with stocks, if you know how, you can also make money with options in a falling market, putting a lot less capital at risk. Options also allow you to make money consistently from the market, rather than having to wait months or even years for a stock to move and generate a profit.

Finally, it's not necessary for an options trader to be familiar with the whole market, which is a massive undertaking. Instead, the trader can focus on a few favorite stocks, become very familiar with that stock's movements and patterns, and plan an options strategy to earn money from those patterns.