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Understanding Option Trading


An option provides the owner the right to buy or sell an asset at a pre-determined price before or on a certain date. Options are basically of two types - Calls and Puts. A call provides the right to the owner to buy an asset while a put provides the right to the owner to sell an asset. Trading options can be very profitable for the owners.  However, it is important to gain a proper knowledge and an understanding of options trading terms.

This infographic has been designed to make it easier for you to understand option trading.

 

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Edited by Kim

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Recent Articles

Articles

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    By cwelsh,

    • 0 comments
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  • Investment Ideas for Conservative Investors

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    • 0 comments
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    By Levi Ioffe,

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    By Ophir Gottlieb,

    • 0 comments
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    By Michael C. Thomsett,

    • 0 comments
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    • 0 comments
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  • Iron Condor vs. Iron Butterfly

    Iron Condor and Iron Butterfly are both very popular strategies. Both of them are usually used as non-directional strategies (although butterflied can be used as a directional trade as well). Both trades are vega negative and gamma negative, but there are also few important differences between those two strategies.

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  • How a Fund is Developed

    Many individuals are curious as to the testing process for a new fund.  With the plethora of funds continually being developed, having some insight into this process can be helpful for investors.  At the very least, it can provide a series of questions which should be asked in conducting due diligence on fund managers.

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  • Why Dow Points Are Meaningless

    A quick online search for “Dow rallies 500 points” yields a cascade of news stories with similar titles, as does a similar search for “Dow drops 500 points.” These types of headlines may make little sense to some investors, given that a “point” for the Dow and what it means to an individual’s portfolio may be unclear.

    By Kim,

    • 0 comments
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