Who Trades Options?

Who Trades Options? Two broad categories of players exist in the option markets: risk seekers and risk avoider’s. A risk seeker, also known as a speculator, is the type of trader that is trying to profit from a prediction in market direction. A speculator will have his or her own…

Why Trade Options?

Why Trade Options? Option trading provides many advantages over other investment vehicles. Leverage, limited risk, insurance, profiting in bear markets, each way betting or market going nowhere are only a few. But let’s look at a couple: Leverage One thing to note before we go on is that the buyer…

What are Options?

What are Options? Definition: An option contract is an agreement between two parties to buy/sell an asset (stock or futures contract as an example) at a fixed price and fixed date in the future. It is called an option because the buyer is not obliged to carry out the transaction.…

Learning to Trade Options

Learning to Trade Options Option trading has many advantages over other investment vehicles. Trading in option contracts can give an investor the flexibility to place bets on very specific market outcomes. For example, an option trader can make a bet that in 6 months time a stock will be trading…