What are Options?
1. What is an Option Symbol?
2. What is the Strike Price?
3. What is the Settlement Price?
4. What is the Expiration Date?
5. What is the Option Premium?
Option buyers acquire this right from option writers (sellers) at a value called the Premium.
The Premium value will change in accordance with market conditions, such as a change in the underlying asset's price or volatility, and/or a change in the time to expiration or interest rates.
6. Options Limit Order Types
- Limit
- Best Bid Offer (BBO)
7. What are the advantages of trading Options?
- Downside is capped at the Options Premium paid
- Hedge against market risks
- More flexibility in managing portfolio risks
- You can set up multiple trading strategies with unique risk/reward profiles
- Potential to profit from a variety of market conditions, such as the bull, the bear, and the sideway market trends.
8. How does a Call Option work?
9. How does a Put Option work?
10. Basic Options Strategies
The difference is that the Call and Put Options do not have the same Strike Prices. This difference in the Strike Prices generally makes Strangle a cheaper option strategy.