Option Trading Strategies

What Are Options?

Options are financial contracts that give you the right, but not the obligation, to buy or sell an asset at a pre-decided price within a specific timeframe.

There are two main types:

1. Call Option

A call option gives you the right to buy an asset at a fixed price (called the strike price).

You buy a call when you expect the price to go up.

2. Put Option

A put option gives you the right to sell an asset at a fixed price.

You buy a put when you expect the price to go down.

Unlike buying stocks, where you pay the full amount, in options you pay only a premium to enter a trade, which makes it cheaper and more flexible.