This isn't like the usual market order of buying or selling a security, where the investor is obligated to do so. This nuance is part of the strategy around trading options; sometimes, it's in the ...

the trader will be required to buy at a higher than market price. Example of a Cash-Secured Put Strategy In this example, a trader sells a one-month put option on Company XYZ with a $45 strike ...

If you buy one call contract, you are essentially long 100 shares of that stock. As such, purchased call options are a bullish strategy. To understand how buying call options might play out ...

As with all premium-buying strategies, holders of long put options will pay a richer premium when implied volatility is high relative to historical levels. Put buyers should compare the option's ...

However, experienced traders can also go on to consider more complex strategies that involve buying or selling combinations of options. It is important to have a strong grasp of options trading ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

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Options trading is inherently risky. Both buying and selling options carry higher risks than those prevalent in the stock market. This increased risk stems from several factors. Firstly, options ...

The third strategy is straightforward. You buy 100 shares of MicroStrategy at the current price of $352.67. You then sell a put option well out of the money for income or the potential to buy ...

A long call is the most straightforward call-trading strategy. If an investor is bullish on a stock (i.e., they think it will go up in value), they can buy a call option on it. If they choose an ...