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
When you buy a call option, you gain the right to purchase shares of a stock at the strike price before the expiration date.
Covered calls are a popular way for long-term investors to generate short-term income on their holdings.
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.
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.