Options Trading Tips For Beginners

Option trading tips vary widely and cover lot of options trading opportunities. However, the basic options trading tips could be classified into three major categories as bullish options trading tips, neutral options trading tips, and bearing options trading tips. Each category is briefly presented below for better understanding of options trading in different market conditions.

The bullish option trading strategies would include buying call options, selling put options, bullish call option spread, and bullish put option spread. The neutral option trading strategies would comprise of selling covered call options, sell straddle strategy, sell strangle strategy, and calendar spread. The bearish option trading strategies would consist of buying put options, selling call options, bearish call option spread, bearish put option spread, and put option hedge. These individual strategies are highly technical in nature and should be learned over a period of time from expert financial consultants before a beginner ventures to execute the various option trading tips and strategies.

However, four types of stock options trading are practiced in the United States stock markets. They are long call options, long put options, short call options, and short put options. The long call options are exercised or advised by a trader to an investor when there is a strong belief that the price of the stock would increase in the near future. Under this assumption, the option to buy the stock at a price nearer the current price is purchased instead of actually buying the stock.

If the stock price actually increases, the purchaser would benefit from the profit less the premium amount paid. If the stock price falls below the strike price, then the loss would be only the premium amount. The long put option would work in exactly the opposite manner. Similarly, the short call option would be chosen when the stock price is expected to decrease, the stock would be written as a sell call option and the short put option would be selected when the stock price is anticipated to climb. However, these options trading tips should be taken only as a basic guidance and actual strategies should be learned from experts.

To learn how to make money in the stock market trading options, attend one of our Power Workshops on Options Trading offered every Thursday for FREE. Click HERE to register now.

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