An option
is defined as a “contract giving the buyers the right, but not the obligation
to buy or sell an underlying asset a (stock or index) at a specific price on or
before a certain date”. It is a derivative for it gets its value from an
underlying asset. Stock options the index or equity. While options have expiry
dates and there are no specified numbers. It is of two kinds namely call and
put. The best way to trade options is to understand the following trading
strategies.
When the
clients feel bullish and anticipate the price of the particular share to rise, long
call options are used
This is a
strategy opposite to long call options
for an investor uses it when he feels bearish and expects the price of a share
uses it when he feels bearish and expects the price of a share to rise.
If the
trader opines that the stock is not volatile and tries to get the option the premium on two contracts, he follows this strategy.
A customer uses this strategy when the stock is very volatile but the rise and
Falls cannot be predicted. Binary options trading means the risk a trader places
on whether or not a particular asset will rise in
its value at a certain time.
These the strategy used either in combination or separately help in getting the most
expected profit. But the customer has to be choosy and based tools like options
calculation he can select on what to invest and be ready to quit when things
are in a favorable position.
