I know this is noooobbish..
But what is the intrinsic difference between buying puts and shorting the stock?
I know theres way more money in options.. but why is that? I want to eventually trade options instead of stocks.. but i still don't understand that easy concept.
The reason there's more money in buying options is because you're going up in price with options.
The problem with shorting is that the stock only has so much value that you can take away from it. If a stock is at $50 and you short there then it can only lose a maximum of $50. And realistically even that's not possible even if it goes bankrupt it won't go to $0.
You can't gain more than 100% by shorting a stock. But when you're going up in price you can because it can more than double. If you go long a stock at $50 it can go past $100.
With options they're much more volatile because of the time value for one, but also the intrinsic value. There is no 'intrinsic' value when you go long/short on a stock.
But shorting IMO is the worst way to go. Not only does it minimize your potential gain but it also maximizes your risk. When you short a stock there's an unlimited amount of risk if the stock soars after you short. Unlike options, you can only lose your investment (maximum). If you invest $500 in options that is your maximum loss. But if you short you can lose a lot more.
That's why I never short, it's really the worst way to go IMO