Options Trading
The first—and perhaps biggest—challenge of options trading is understanding what an option is.
An option is a contract giving you the right, but not the obligation, to buy or sell a specific security at a specific price over a specific period of time. After that period of time has elapsed (known as “expiration day”), the option ceases to exist.
A call option gives you the right to buy the security.
A put option gives you the right to sell the security.
Make Big Profits with Growth Stocks
Cabot Growth Investor is our flagship investment advisory. Published since 1970, this advisory has helped countless investors grow their wealth. Get weekly updates about stocks recommended in our legendary Model Portfolio!
Options Trading Post Archives
In the interest of illuminating options trading for beginners, here are a few strategies (and Advisories) to consider starting with.
The market has entered something of a choppy correction. But if you know how to use covered calls, you can boost your profits quickly.
What does drafting an NFL prospect or trading down for more picks have to do with investing? They’re both a matter of pricing risk.
Options order flow can be a highly bullish signal for the underlying stock, especially when you see oversized trades that really stand out.
Iron condors are a low-risk, yield-creating options strategy to net a quick profit. Here’s how to execute an iron condor trade.
LEAP call options are an excellent entry point for new option investors. Here are 3 reasons buying LEAPS can beat buying stocks.
Let me tell you about the greatest options trade I saw in my 10 years on the Chicago Board of Options Exchange - and what I learned from it.
When market volatility rises it can be tempting to sell out of stocks entirely, finding a way to hedge your portfolio may be a better choice.
Buying or selling LEAPs puts can benefit investors who want longer-term contracts with less volatility than shorter-dated options.
If you’re worried about the outcome of the presidential election (or the market in general for the next seven months) here’s how to hedge your portfolio with options.
The options market is vastly different now than it once was, thanks to computers. You can’t compete with algorithms, so what do you do?
Much like home and auto insurance, buying put options is a way to protect your portfolio from sudden disaster. Here’s how it works.
Using my unusual option activity scanner to identify how sophisticated hedge funds are trading is a powerful tool for identifying trends.
Options trading can often be dismissed as too risky or too confusing. But it’s time to expose some of the five biggest options trading myths.
Writing covered call options is a great way to boost your yield on stocks you already own, and involves a lot less risk than most investors think.