4. options trading strategies

What is Options Trading?

Options are a financial derivative: a product that derives its value from another underlying investment. As the name implies, options give you the option (not a requirement) to buy an investment at a specific price on a future date.

Investments are a fairly advanced investment product. Many brokerages require customer approval and place limits on the ability to trade options. Newer options traders may be limited to call and put options, while more experienced traders could access more advanced and riskier options strategies.

Because options can be complex, it’s best to get a lot of experience with puts and call before exploring more exotic trades such as the excitingly named “iron condor” or the “reverse iron albatross spread.” When you focus on basic call and put options, it’s easier to understand what you’re doing and limit your potential losses.

Leave a Reply

Your email address will not be published. Required fields are marked *