Options Trading For Beginners: 8 Strategies Plus Advice From Financial Experts

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Options trading for beginners might seem confusing, but it can be a money-making strategy to add to your investing toolkit if you’re an experienced trader.

Options are a type of derivatives contract that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a set price on or before a certain date

What Are Options?

Options Trading For Beginners: Basic Strategies

1. Buying Calls  (Long Calls)

When you buy a call option, you gain the right to purchase shares of a stock at the strike price before the expiration date.

2. Covered Calls

Covered calls are a popular way for long-term investors to generate short-term income on their holdings.

3. Long Straddles

If you’re unsure whether a stock will go up or down, but you’re convinced that it will experience a lot of short-term movement, employ the  long straddle option  trading strategy.

4. Buying Puts (Long Puts)

The term “long” can be confusing in this context, but it just refers to the act of the trader buying an option and hoping to profit from it in  the future.

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