{"id":40607,"date":"2023-09-20T23:08:00","date_gmt":"2023-09-20T23:08:00","guid":{"rendered":"https:\/\/businessyield.com\/?p=40607"},"modified":"2023-09-21T14:30:39","modified_gmt":"2023-09-21T14:30:39","slug":"options-trading-strategies","status":"publish","type":"post","link":"https:\/\/businessyield.com\/bs-investment\/options-trading-strategies\/","title":{"rendered":"OPTIONS TRADING STRATEGIES: Best Strategies for Beginners","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"
Options trading is a contract that allows or enables an investor to either buy or sell stocks, securities, mortgages, ETFs, or any commodity at a predetermined price on a specific date. It allows a stock trader to choose or diversify to manage risks and make a profit. Options trading requires a clear understanding of strategies and risk management in carrying out a trade. However, it is carried out based on strategies that help an investor stay protected, leverage funds, and make more income in the stock market. These strategies are complex and complicated, but we will make you understand the best option trading strategies, beginners’ option trading strategies, and the best books on options strategies for beginners to use.<\/p>\n
These are plans or technical analyses that guide a trader in buying and selling securities, stocks, etc. These strategies enable a trader to limit risk and maximize return at any point of the trade in the stock market. However, are tactics primarily designed to handle systemic risk, which is unavoidable yet can have a catastrophic effect on trade. <\/p>\n
Moreover, a trader must conduct extensive market research on current market trends and patterns before making a trade. When creating a strategy, a trader should consult a broker-dealer to choose profitable trading instruments and manage trading operations.<\/p>\n
Option trading strategies for beginners are<\/p>\n
It is a bullish strategy that simply means buying on a call. This strategy is used when a trader suspects the market’s price movement is in an upward direction. Here, the trader is said to be bullish, so they place a call (long call or short) to make a profit.<\/p>\n
For example, gold is trading at $50. A trader is expecting the market price to move up, so he buys a call option<\/a> of gold at the contract of 1 carat, having a strike price of $50. The cost is $50 and the premium is $50*1. Then, as the market price moves up from $50 to $90. He makes $250 at $80.<\/p>\n Loss: The loss is the premium paid for the option. At any point between the strike price A and the break-even point, you will make a loss, although not the maximum loss.<\/p>\n