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Options trading allows investors to limit their risk and leverage their capital, but it can also expose them to amplified losses. It's one of the most flexible trading styles because of the many...
This options trading strategy is the flipside of the long put, but here the trader sells a put — referred to as “going short” a put — and expects the stock price to be above the strike ...
Put options rise in price when the underlying stock falls in price, and this basic option strategy gives the put owner the ability to multiply their money over the duration of the option contract ...
The most bearish of options trading strategies is the simple put buying or selling strategy utilized by most options traders. The market can make steep downward moves. Moderately bearish options traders usually set a target price for the expected decline and utilize bear spreads to reduce cost.
The very first thing a novice should understand is the unique risk level associated with different options trading strategies. Consider this starkly worded warning from the SEC:
Portfolio margin is a risk-based margin policy available to qualifying US investors. The goal of portfolio margin is to align margin requirements with the overall risk of the portfolio. Portfolio margin usually results in significantly lower margin requirements on hedged positions than under traditional rules.