Option Trading ❲2025❳

: The agreed-upon price at which the asset can be bought or sold.

: One contract typically controls 100 shares, allowing for significant market exposure with less upfront capital than buying shares outright. Basic Strategies OPTION TRADING

: You buy a call if you expect the stock price to rise. Your risk is limited to the premium paid, but potential profit is theoretically unlimited. : The agreed-upon price at which the asset

Options trading involves buying or selling contracts that give you the right—but not the obligation—to buy or sell an asset (like a stock or ETF) at a set price within a specific timeframe. Your risk is limited to the premium paid,

: You receive the premium upfront, but you take on the obligation to fulfill the contract. Selling "naked" (without owning the stock or cash) carries potentially unlimited risk if the market moves sharply against you.

: You own the stock and sell a call against it. This generates immediate income (the premium) but caps your potential profit if the stock price soars.

: Risk is strictly limited to the premium paid. However, options are time-sensitive; if the stock doesn't move as expected before expiration, the entire investment can be lost.