A basic understanding of option trading

May 19, 2008 by Daniel Beatty

Do you know why you want to trade options? Is it the high percentage gains that are possible or is it because of the leverage that trading options can give you? Or is it because you can get started with very little money in comparison to trading stocks?

Then on top of that do you know what option strategy you want to use to make your gains? Obviously I like the conservative methods of trading credit spreads, iron condors, and diagonal spreads. How about you have you thought about what strategy you like and what fits your style?

Here’s an article for the beginner that is a must read that focuses on what I just asked you here. Trading Options In A Modern Market