Ten Options Strategies for You
The mistake made by most traders is going into trading options without knowing what option strategies are and the ones that can help them get the most out of their investment. Understanding what option strategies are and the ones available to you is what you need to get the most out of trading options and limit the risks you will face. If you want to take advantage of the flexibility and power of stock options, you must know the option strategies at your disposal. Below are the ten option strategies every investor should know before jumping into trading options.
For an investor having a short-term position on the stock market, covered call is the best option strategy because your premium will not lose value in case of a decline in the underlying stock’s value while still generating income. One way of mitigating risks when venturing into trading options is taking advantage of the Married Put which will ensure you remain in a strong financial position regardless of how sharply the stock’s prices fall.
The Bull Call Speed is another strategy you should know if you want to become successful in trading options; this is the best way to generate revenue because you buy calls at a specific price and sell for a higher price, and is effective if you are planning moderate rise in asset price. As an investor, there are occasions when the asset prices will fall resulting in huge losses, however, you can limit the losses by using the Bear Put Strategy.
As a potential trading options investor long straddle is one of the most important strategies you should familiarize yourself with because it opens up the possibility of unlimited gains as well as significant losses too. Long strange is an option strategy that will be valuable in those times when you don’t know whether an asset price is will shift to the positive or negative side.
The iron corridor strategy is one of the ten strategies you should know of to maximize gains in trading options; you can use this strategy to get the most of a stock experiencing low volatility in the market, and you will be one among the many people who will be using it. You should know about Iron Butterfly strategy if you want to become at trading options investor because it limits risks and maximize return. Ensure you have mastered these option strategies before jumping into trading options.