The difference between stock and option: stock give you a small piece of ownership in the company, while option is just contracts that give you the right to buy or sell the stock (underlying asset) at a specific price by a specific date. Options are one of the least understood forms of investment, and the most complexed one.  After getiing familiar with basic consepts like puts and calls, long and short positions, volatility and strike price, hedging and speculation trader starting to apply simple option trading strategies to his trades, and slowly adwance to a option combination strategies.

Dozens of options trading strategies exist today.  For example, if volatility Index climbing back above 40, you may want to consider using limited risk options as an investment vehicle. With this strategy you can manage your risk, set profit targets, and have time to see a market move in your favor…   the stock trader needs to find out those trading options which have a good reputation for giving a good return on investment.

Please share all new and innovative ideas on options trading!