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commission fees when trading options. They can greatly cut into your net profit or add to your net loss.

And finally, don't forget the tax man. Just like other types of securities, you must report your profits and losses resulting from trading options to the IRS as capital gains and losses. But you probably knew that already, right?

We are now ready to move on from a speculative type of investment to another type of investment many view as the safest way to invest: mutual funds. …