Options Trading Explained: Options are tradeable contracts that let investors bet on the future performance of individual securities or the market as a whole. They provide investors with the ability to make profits in both rising and falling markets. Options are also a great way to hedge against a potential loss in stock or index value.
Options trading can be complex and risky, but when used correctly, it can be a profitable venture. To ensure you make the most of your options trading, it is important to understand the basics. That includes the different types of options, how the options are priced, and the strategies you can use.
Types of Options: There are two main types of options: call options and put options. A call option gives the buyer the right, but not the obligation, to buy the underlying asset at an agreed-upon price before the expiration date. A put option gives the buyer the right, but not the obligation, to sell the underlying asset at an agreed-upon price before the expiration date.
Options Pricing: Options are priced based on several factors, including the underlying stock or index price, the strike price, the expiration date, and the implied volatility of the underlying asset. The strike price is the price at which the option can be exercised, and the expiration date is the date on which the option expires and can no longer be exercised. Implied volatility is the expected volatility of the underlying asset over the life of the option.
Options Strategies: There are a variety of strategies you can use when trading options. These include buying calls and puts, covered calls, bull call spreads, bear put spreads, and more. Each strategy has its own benefits and risks, so it is important to understand the strategies and how to use them before trading.
The 2023 stock Candlestick and Options Profit Trading Bundle: To help you learn to identify price patterns, set up automatic trading, and more, the 2023 stock Candlestick and Options Profit Trading Bundle is a great way to get started. It includes step-by-step tutorials, access to online trading tools, and more.
OKX Partners with Hashflow and Greeks.live: In addition to the partnership with Hashflow, OKX has tapped options trading platform Greeks.live to offer traders an extensive range of options trading strategies. This partnership will help traders to better understand the risks and rewards associated with options trading.
Options Trading Sentiment: This is actually the top options trading tip of all time! Sentiment indicators really seem to trip up traders, by the way. Watching sentiment is key to determining whether an option is undervalued or overvalued.
Options Trading in 2021: In 2021, single-stock and index options more than doubled from 2019 levels. However, the yearly growth slowed and retail traders retreated from the market.
Peloton Interactive Inc (NASDAQ: PTON): investors in Peloton Interactive Inc (NASDAQ: PTON) saw new options begin trading this week, for the February 2023 expiration.
Huntsman Corp (NYSE: HUN): investors in Huntsman Corp (NYSE: HUN) saw new options begin trading this week, for the August 2023 expiration. One of the key inputs that goes into the price an option buyer is willing to pay, is the time value, so with 8 months until expiration the newly available contracts represent an attractive alternative to traders looking to gain exposure to HUN.
iQIYI Inc (NASDAQ: IQ): investors in iQIYI Inc (NASDAQ: IQ) saw new options begin trading this week, for the March 2023 expiration. One of the key inputs that goes into the price an option buyer is willing to pay, is the time value, so with 9 months until expiration the newly available contracts represent an attractive alternative to traders looking to gain exposure to IQ.
Xerox Holdings Corp (NASDAQ: XRX): investors in Xerox Holdings Corp (NASDAQ: XRX) saw new options begin trading this week, for the February 2023 expiration. One of the key inputs that goes into the price an option buyer is willing to pay, is the time value, so with 8 months until expiration the newly available contracts represent an attractive alternative to traders looking to gain exposure to XRX.
