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Options Trading

The first—and perhaps biggest—challenge of options trading is understanding what an option is.

An option is a contract giving you the right, but not the obligation, to buy or sell a specific security at a specific price over a specific period of time. After that period of time has elapsed (known as “expiration day”), the option ceases to exist.

A call option gives you the right to buy the security.

A put option gives you the right to sell the security.


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Options Trading Post Archives
Buying or selling LEAPs puts can benefit investors who want longer-term contracts with less volatility than shorter-dated options.
When investing in oil you have many choices from companies to funds, but long-term option investments may be the best play of the group.
Using my unusual option activity scanner to identify how sophisticated hedge funds are trading is a powerful tool for identifying trends.
Headlines about Michael Burry “buying” $1.6 billion of put options have been everywhere; they’re also incredibly misleading. Here’s why.
Much like home and auto insurance, buying put options is a way to protect your portfolio from sudden disaster. Here’s how it works.
Subscribers have been asking me how to protect profits using options ever since the bull market took a breather. Here’s my response.
Options trading can often be dismissed as too risky or too confusing. But it’s time to expose some of the five biggest options trading myths.
Gamblers may be familiar with the Martingale strategy of doubling down on losing bets. But that can be a dangerous investing approach.
Identifying unusual options activity can be a key to unlocking big gains in stocks that the big hedge funds are about to pour into.
Want to know how the big institutional investors use options? Here is an example of how one trader spent $132 million on three tech stocks.
Volatility is the lowest it’s been for years, which makes it an ideal time to deploy my favorite investing strategy in a low-volatility market.
LEAP call options are an excellent entry point for new option investors. Here are 3 reasons buying LEAPS can beat buying stocks.
Options trading has its own vernacular and to get started with the basics, it’s important to be familiar with options trading terminology.
Contrary to popular belief, options trading is a good way to reduce risk. Weekly options? That’s more akin to a roll of the dice.
In the interest of making options trading more accessible for beginners, here are a few strategies (and Advisories) to consider starting with.