If you have never heard the term options trading, it is a high time to learn about it. Trading is something that offers a platform to earn more in less time. All you need to do is to master the skills to learn how market functions.
In this post, I will try and cover all those important aspects that will help you in learning Options Trading.
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But before jumping further into the article, I would like to mention one important thing, if you’re a beginner go through some options trading videos to learn some basics.
What are Options?
Investor portfolios are usually constructed with several asset classes. These may be stocks, bonds, ETFs, and even mutual funds. Options are another asset class, and when used correctly, they offer many advantages that trading stocks and ETFs alone cannot.
Options are instruments like other investment portfolios such as stocks, bonds, ETFs, and even mutual funds but with more opportunities to earn more.
You can easily find websites providing option trading strategies for beginners to learn it easily.
Options belong to derivatives family, that is more powerful than another investing method in terms of added income, protection, and even leverage. So if you are one of them who don’t want to invest heavily in stocks, option fits best in your needs.
In simple words, It is basically an agreement between two parties to sell or purchase the right to an underlying stock.
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Type of Options
Options are further classified into two main categories:
- Call Options
- Put Options
Others listed options are the combination of strategies based on these prime categories.
A Call Option a method to purchase an underlying Stock on or before its expiration date in return of a specific premium. Call option doesn’t allow you to sell the assets which you have bought from the seller.
On the other hands, put option is a way to authorize the holder to sell the underlying Stock on or before its expiration date.
While this article is helpful to drive some basic about options trading, you can visit this website to learn more about option trading strategies & how does it work.