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Options Trading Strategies

October 28th, 2013

Those who begin investing in options are not necessarily interested in buying or selling the underlying stock but rather want to take advantage of its price movement. As the stocks move up and down because of supply and demand, an options investor will try to identify (early on) changes in price that they can leverage. This is important because the biggest success driver when investing in options is to capitalize on the stock’s price movement. For instance, if you are a “call buyer,” you’ll want to move when the stock rises, whereas if you’re a “put buyer,” you’ll want to make your move when the stock falls.

Investing in OptionsHere are other options trading strategies: We encourage clients to replace stock with options whose strike price is lower than the current stock price. We also caution them when doing so not to choose a less expensive call option, which gives no guarantees. Additionally, we point them to Chuck Hughes Weekly Option Advisory Service. The exclusive service helps small investors who are interested in smarter trading and investing in options.

While fast moving and tricky, options give an investor the leverage to purchase a share at a lower cost or sell a security at a certain price before a certain day. Learn how to predict when to make your move by joining our options advisory service.

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