An investor guide to trading options

Before continuing, we need to emphasize that options represent a higher-level form of investment, and carry a much higher amount of risk. As such, investors are advised to thoroughly understand and learn how to trade options before investing, and to only invest with risk capital.

Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options ODD. Copies of the ODD are available from your broker, by calling OPTIONS, or from The Options Clearing Corporation, One North Wacker Drive, SuiteChicago, Illinois This guide assumes that you already have a basic understanding of the fundamentals of option trading, such as buying and selling calls and puts. If you wish to read up on the foundations of option trading, do check out our Option Basics Guide.

In essence, every option strategy - no matter how complicated they are - comes down to a combination of buying and selling an investor guide to trading options and put options at various strike prices and exipration dates.

Options Trading Explained - Free Online Guide to Trading Options

Different combinations of these basic building blocks of option trading are used to suit the investor's risk profile and market outlook.

Are you bullish, neutral or bearish on a particular stock? Are you prepared to risk more or prefer a more conservative strategy?

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Do you prefer to monitor taxation employee stock option exercise price trades daily or buy a position and wait till expiration? Whatever your preferences are, there's an option strategy for you. This guide will cover some of the more advanced options strategies such as butterflies and iron condors.

An investor guide to trading options Stock Options Trading and Technical Analysis Basics.

Stock options are more complex and risky than stocks. Carefully study and learn how to trade options before applying these advanced options strategies.

Also, only invest with money that you can afford to lose. Bullish Strategies Call Backspread Covered Call Synthetic Long Stock Married Put. Bearish Strategies Covered Put Put Backspread Synthetic Short Stock.

Neutral Non-Volatile Strategies Call Ratio Spread Long Butterfly Long Iron Butterfly Long Iron Condor Put Ratio Spread Short Strangle. Volatile Strategies Long Strangle Short Butterfly Short Iron Butterfly Short Iron Condor Straddle. Topics in this Guide Bullish Strategies Bearish Strategies Neutral Strategies Volatile Strategies. All stock options trading and technical analysis information on this website is for educational purposes only.

It should not be considered the sole source of information for making actual investment decisions.