Ten Options Strategies for You
For a trader considering venturing into trading options, there are options strategies you should know to ensure you are maximizing the returns on your investment. When you take the time to learn about them, you will realize there are so many you can use to your advantage to maximize returns and limit the risks you usually face. If you want to take advantage of the flexibility and power of stock options, you must know the option strategies at your disposal. If you are looking to get into trading options, you should know the following ten option strategies.
For an investor having a short-term position on the stock market, covered call is the best option strategy because your premium will not lose value in case of a decline in the underlying stock’s value while still generating income. One way of mitigating risks when venturing into trading options is taking advantage of the Married Put which will ensure you remain in a strong financial position regardless of how sharply the stock’s prices fall.
Any investor should learn about the Bull Call Speed because it will come in handy when they venturing into trading options; this can be yours simplest way of generating income because like with other businesses, you buy at a specific price and sell the same number of calls at a higher price. Unlike the Bull Call Speed strategy, the Bear Put Spread is normally used when an investor is expecting asset prices to decline which is why you should master it, but instead of buying calls, you are buying puts at a specific price and selling for lower strike price.
Another trade option strategy you should know about is the long straddle; this will come in handy when you are expecting the price of an asset to move significantly but you are unsure of the direction it might go; there is the potential for maximum gains with this strategy although the maximum loss is limited to the amount you paid for them. Long strange is an option strategy that will be valuable in those times when you don’t know whether an asset price is will shift to the positive or negative side.
As a trading options investor iron corridor options strategy is one of the things you should master because there is always the potential that you will earn a small amount of premium. In case you find yourself dealing with a non-volatile stock, Iron Butterfly strategy can come to your aid; you will earn income with this strategy, plus a possibility of a small gain. If you have been considering trading options, these strategies will help you maximize returns and limit risks.