What are option trading strategies?

Option trading strategies are integral to option trading which depend on the bullish, bearish and neutral outlooks for the underlying asset and the risk tolerance of the investor. Traders may find it difficult to choose a suitable option trading strategy.

What are neutral strategies in options trading?

Neutral strategies in options trading are employed when the options trader does not know whether the underlying asset's price will rise or fall. Also known as non-directional strategies, they are so named because the potential to profit does not depend on whether the underlying price will increase or decrease.

Are options a good strategy for a beginner investor?

Options trading may sound risky or complex for beginner investors, and so they often stay away. Some basic strategies using options, however, can help a novice investor protect their downside and hedge market risk. Here we look at four such strategies: long calls, long puts, covered calls, protective puts, and straddles.

What are stock options?

Options offer alternative strategies for investors to profit from trading underlying securities. Learn the basic options strategies such as calls, puts, covered calls, and protective puts. What Is a Stock Option? What's the Difference Between Short Selling and Put Options?