Strategy of call and put option benefits


Strategy of call and put option benefits


Exchange-traded options first started trading back in 1973. But over the past decade, the popularity of options has grown in leaps and bounds. According to data compiled by the Options Industry Council, the total volume of options contracts traded on U.S. exchanges in 1999 was about 507 million. By 2007, that number had grown to an all-time record of more than 3 billion.So why the surge in popularity. Although they have a reputation for being risky investments that only expert traders can understand, options can be useful to the individual investor.

The sale of put options can be an excellent way to gain exposure strategy of call and put option benefits a stock on which you are bullish with the added benefit of potentially owning the stock at a future date at a price below the current market price. To understand how selling puts may benefit your investment strategy, a quick primer on options may be helpful to some.TUTORIAL: Options BasicsCall Options Vs. Put OptionsVery simply, an equity option is a derivative security that acquires its value from the underlying stock it covers.

Owning a call option gives you the right to buy a stock at a predetermined price, known as the option exercise price. When you purchase a call option you get a contract that entitles you to buy the underlying commodity or financial instrument, such as a share of stock, at a guaranteed price called the strike price. You pay a fee called a premium for the call option, and you can exercise your right to buy until the option expires.

Call options have advantages that make them powerful tools for investors. LeverageThe premium for a call option costs far less than the equivalent underlying security. DescriptionA long straddle is a combination of buying a call and buying a put, both with the same strike price and expiration. RISK WARNING: Please note that Binary option trading entails substantial risk of loss, and may not be suitable to everyone. Trading could lead to loss of your investment capital, please ensure you understand the risks involved.

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And benefits of option call strategy put

And benefits of option call strategy put

Strategy of call and put option benefits



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