OPTIONS TRADING

Options trading is a way to potentially make money by predicting how the price of an asset (such as a stock, commodity, or index) will move in the future. There are two main types of options: call options, which give the holder the right to buy an asset at a certain price on or before a certain date, and put options, which give the holder the right to sell an asset at a certain price on or before a certain date.

COMMON  OPTIONS STRATEGIES:
 

1. Buying call options: This strategy involves purchasing call options to speculate on the price of a stock or other asset going up.

2. Selling call options: This strategy involves selling call options to collect premium income and potentially make money if the stock price stays below the strike price of the option.

3. Buying put options: This strategy involves purchasing put options to speculate on the price of a stock or other asset going down.

4. Selling put options: This strategy involves selling put options to collect premium income and potentially make money if the stock price stays above the strike price of the option.

5. Covered call: This strategy involves writing (selling) call options on stock that an investor already owns. This generates income from the option premium and protects the investor against a potential drop in the stock price.

6. Bull Call Spread: This strategy involves buying a call option at a low strike price and selling another call option at a higher strike price of the same underlying asset.

7. Bear Put Spread: This strategy involves buying a put option at a high strike price and selling another put option at a lower strike price of the same underlying asset.

8. Straddle: This strategy involves buying both a call and a put option on the same underlying asset with the same strike price and expiration date.

9. Strangle: This strategy involves buying both a call and a put option on the same underlying asset with different strike prices, but the same expiration date.