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Options trading can be complex, and the trading jargon may confuse even experienced investors and traders. Two of the most common options contracts to understand are call and put options.
The best brokers for options trading can help you identify attractive options trades. 2. Bear put spread. What the bull call spread does for rising stocks, the bear put spread does for falling stocks.
The post 6 Stock Option Trading Strategies to Consider appeared first on SmartReads by SmartAsset. ... Buying call and put options on same underlying stocks at same strike prices and expiration.
In London, puts and "refusals" (calls) first became well-known trading instruments in the 1690s during the reign of William and Mary. [5] Privileges were options sold over the counter in nineteenth-century America, with both puts and calls on shares offered by specialized dealers.
Puts may also be combined with other derivatives as part of more complex investment strategies, and in particular, may be useful for hedging. Holding a European put option is equivalent to holding the corresponding call option and selling an appropriate forward contract. This equivalence is called "put-call parity".
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.
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