Beware, Options Investors: You Pay a High Trading Price Compared With Stocks

Options on stocks and ETFs had much bigger bid-ask spreads than those for the stocks and ETFs themselves

A George Mason professor ran the numbers on options spreads.Illustration: Beth Goody

When financial markets are volatile, many investors head to the options market, either for downside protection or to make a bet on which way things could be heading.

With this in mind, we decided to test just how costly it is to trade options, which give the holder either the right to buy or the right to sell an asset at a set price within a given amount of time.

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