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At exactly $20, the trader would keep the full premium and hang onto the stock, too. ... This options trading strategy is the flipside of the long put, but here the trader sells a put — referred ...
Right now is a great time to be an options trader. ... but you save 80% when you trade 100 contracts and you save a full 50% when you trade only 10 contracts or more. Fidelity.
The options trader makes a profit of $200, or the $400 option value (100 shares * 1 contract * $4 value at expiration) minus the $200 premium paid for the call.
As with all securities, trading options entails the risk of the option's value changing over time. However, unlike traditional securities, the return from holding an option varies non-linearly with the value of the underlying and other factors. Therefore, the risks associated with holding options are more complicated to understand and predict.
The trader may also forecast how high the stock price may go and the time frame in which the rally may occur in order to select the optimum trading strategy for buying a bullish option. The most bullish of options trading strategies, used by most options traders, is simply buying a call option. The market is always moving.
Options trading is one of the last holdouts in the trading world where investors still have to fork over cash for commissions. Major online brokers don’t charge for stock and ETF trades, and ...
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