start reading

What Is Option Trading?

May, 2023

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.

Premium Stock Market Articles For Free Check Now