Option Trading Strategies

Option Trading Strategies

So what is an option trading strategy? Well to put it simply,option trading strategies refer to when someone either buys or sells on or more stock options. So what we are basically looking to do is to find a way to use either one, or a combination of options in a way that will maximize our profit whilst keeping our risk as low as possible. It all boils down to people wanting to achieve the highest ROI without having to risk a large sum of money.

There are 3 main types of option trading strategies: Bullish, bearish and neutral. Bullish refers to when the trade believes that the underlying market rates will end up rising. Bearish is where the trader believes that the underlying rates are going to decline and neutral is just that; neutral.

Options allow you to create a combination of short or long positions that can end on either the same or different dates which can all have various strike prices. The strike price is simply the price at which the option contract can be exercised. These are fixed prices within the contract. In a call option this is where the security can be bought and for a put option this is where the shares can be sold. Sometimes the strike price is also referred to as the exercise price.

The simplest option trading strategy to use in order to make a profit would be to buy under-priced options. This should always be your goal when buying an option. If you target cheap options then it means that not only will your risk be greatly decreased, but also if your stock breaches the strike price (the price at which your stock becomes profitable) before the option expires then the amount that you gain will actually end up being higher than if you had purchased a more expensive option.

Your main goal should always be to try and find the best value options. If you can find stock options which are greatly under-priced then you will be in the best possible starting position for any option trading strategy.  Purchasing under-priced shares is just the beginning though, you must always make sure that you know what is going on in the market, otherwise no matter what options you have, they may as well be worthless.

The main trick to any options trading strategy is to find a position which will perform exactly as you expect it to. It sounds simple, but obviously there are literally thousands of factors which can affect your trades. Unfortunately as you can’t be right 100% of the time you will only be making a profit when the underlying asset goes in the direction that you want it to. The main trick with all option trading strategies is to learn the intricacies and get as much information on both the current market and the expected market. Once you have this information you will be in a far better position to be able to make the right calls when it comes to your trades.

Now, in the quest to provide the best in options trading education to people from all walks of life, Options Learning Academy (OLA) offers a series of three two-day seminars of options trading education from beginners to advanced traders who want to sharpen their trading skills, supercharge their profit potential regardless of market conditions, and take control of their financial future.

After graduating from this series of options trading seminars at Options Learning Academy (OLA), participants will gain a thorough understanding of options trading,  acquire the knowledge and skills necessary to trade options like a professional using the right tools.

Additionally, graduates will master simple techniques as well as more complex strategies that can be summarized as follows:

• Buying and selling Calls and Puts
• Butterfly spread
• Condor spread
• Delta neutral trades
• Positions adjustment for maximum profits
• Portfolio management and protection

IMPORTANT! We typically plan for just over 50 people per seminar. Our conference room can fill to capacity quickly, so secure your space today by calling (516) 665-9747 or click HERE to register.

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