What Is Option Trading?
Option trading involves buying and selling options contracts.
Options are derivative securities with predetermined rights.
Two types of options: call options (buy) and put options (sell).
Option trading allows speculation without owning the asset.
Advantages: leverage, smaller investment requirement.
Uses: hedging, generating income, speculating.
Factors: strike price, expiration date, volatility, market conditions.
Strategies: buying/selling options, spreads, straddles, strangles.
Risks: potential loss, market volatility, complexity.
Popular among individuals and institutions for diversification and profit.
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