Option Trading Strategies – One Step Forward
If you are new in the options trading and just got finished with familiarizing With The idea, You Might Be Thinking About Probably option trading strategies. Even all the basic You have options trading ideas, About, you’ll need a good strategy to work for you Make this. Before you start on your option trade, you Must figure out a strategy. Simplest strategy is a long call option. Which is just buying a single call option. But it is just one other option Among Many trading strategies. Some of Them are much more complex, Many Incorporating buying and selling options, put and call Both. In general, They Can Be Divided Into three types. One Being bullish, Which Will Believe the market rates rise. The next is bearish, Which Will Believe the market rates fall. And the last Being neutral, believing the market rates May not change. As it is said Earlier, option trading Strategies Can Be Incorporate complex and multiple buying of put and call options, Which May Increase the chance of profit or DECREASE the amount of maximum Risk. They all end on Can Same or Different days days. Have Same or Different Ones strike price. It all depends on the market of the buyer and Understanding Their future plan. An example how a good dog Demonstrate Can Be helpful strategy in options trading. Say, you’ve Bought a call option and a put option of a stock Both at a strike price of $ 100. If the price of the options are $ 5 each, your total cost of the option is $ 10. Now, if the price of the stock Increases up to $ 120, You Can Exercise the call option and your net gain Would Be $ 120 – $ 10 – $ 100 = $ 10. But if the price falls below $ 80 Then You Can Buy Directly the stock at $ 80 and Exercise the put option. Also In That case, your gain Would Be $ 100 – $ 80 – $ 10 = $ 10. So, if the market moves Either Way, You Can Gain From this strategy. Only way you lose if the market Will Does not change, in case your Risk That Would Be limited to only $ 10. A very basic option of the Trading Strategies That is to buy options are Greatly under-priced. In This way, the window of profit Increases Risk and the maximum amount decreases. Another very important key is the Knowledge of what happening in the market. It enable you to find dog a position in the market moves to Which direction you want. It is not as simple as it sounds, it depends on a Thousand Factors Which Can Go Wrong, But It is a Requirement to do Successful trading. So, it is a good idea to to know more about option trading Various Strategies and Applying a good strategy for option trading business. For This, You Can Various consult licensed FIRMS and consultants to get good advice.