One of the main reasons to trade options is the ability to speculate on the market; that is, the trader is able to invest a relatively low amount of money in exchange for a quick -- and often substantial -- return. Due to the advantage of leverage -- the percent return above and beyond the move in the underlying stock -- options enable investors to earn exponential returns on even a modest stock move. In other words, using options for speculative purposes allows the trader to risk significantly less capital in the market.
An option trader may purchase a call on a stock he thinks is set to rally, or buy a put on an equity he believes is headed for the dumps. When purchasing either a call or a put, the maximum the trader has to lose is the premium paid at initiation -- so if the stock fails to move as expected, the option player loses only a small fraction of what a stock trader would have lost.
By contrast, an option player can experience similar percentage returns as a stock trader, but for a fraction of the initial investment. In fact, because of this, an option player can afford to play the field, speculating on a variety of different stocks, indexes, and exchange-traded funds.
What's more, even a more conservative trader can use options to speculate on the market. While it's true that aggressive traders can opt for options with shorter time frames -- in fact, many stocks now offer weekly options -- the more conservative trader can trade options with expiration dates that are months, and even years, in the future. The longest-term options are LEAPS, or Long-term Equity AnticiPation Securities, which have expiration dates set as far as two years into the future -- so the trader can sit back and watch the market play out, much like a shareholder would.
As you can see, trading options does not require a large commitment of capital, and allows investors to substantially limit risk compared to their initial capital outlay. Furthermore, by diversifying option selection with both calls and puts, investors are able to profit regardless of market conditions -- if they choose their options wisely.