Basics Of Option Trading

Basics of option trading

Basics of option trading. Firstly we need to know about where this option trading come from. It is the part of derivative family. A derivative is a contract between two or more parties whose value is based on underlying financial asset or set of asset. There are many derivatives :- Option. Future contracts. Forward contracts. Swaps. Warrants. But today we are talking about basics of option trading. Options are trading instrument in which a contract is made between two parties. Stock option buyer purchases the right to sell or buy shares of  an underlying stock at a predetermined price from or to the option seller within a fixed period of time. Basics Of Option Trading Options can be traded on several kind of underlying securities. The most common one are :- Stocks. Indexes. Exchange traded funds. So feel to substitute your preference style of trading. If you want to have quick results with limited investments and higher returns, you must go for option trading. Shares are not of your interest, as it requires patience to get a good amount of return. Than you must invest in option instrument.   The buyer of the option gives the premium to seller in Read More …

Options Strategies

Options Strategies

Options Strategies. Very often, traders or investors jump into the options game with very little or no understanding. They are unaware of the many option strategies available for minimizing the risk and maximizing the return. Options Strategies. Trust me, the only little bit of effort is required to learn how to take advantage of the flexibility and full power of options as a trading vehicle. Options Strategies. So, with the same purpose, I have mentioned some important points in the below discussion. I hope it will shorten the learning curve and point you in the right direction. However, options are derivative contracts. Options Strategies. These contracts give right but not the obligation to the buyer, to buy or sell the underlying instrument at an agreed-upon price on or before a specified future date. Options Strategies In fact, the holder of the option is not obligated to exercise the option. But the seller has an obligation to buy or sell the underlying instrument if the option is exercised. Options Strategies. On the basis of different strategies, options can provide you with a large variety of benefits including the security of limited risk and the advantage of leverage. Options Strategies. Another great advantage of playing in option is Read More …