The Perils of Options Investing

Retail investors, still reeling from the aftermath of the financial crisis, prefer bond funds to equities, this recent Bloomberg story shows. As the story points out, ''after getting burned by equities in 2008, when the S&P 500 plunged 38 percent, investors have been slow to warm up to stock funds again. In the four years ended 2012, investors pulled $307 billion from equity mutual funds in the U.S., according to the Washington-based Investment Company Institute.''

Investors have been pouring money into balanced funds recently, as this story notes, so their reluctance to embrace stocks may be lessening. A spike in stock trading volume would make brokerage firms happy, although they haven't exactly been sitting on their hands while the retail investor crowd piled up their cash. To make up for the decline in investors' appetite for stocks and the loss of trading revenue, brokerage firms have been pushing options trading, The New York Times reported Friday.