Understanding Options Trading
Options are financial derivatives that give buyers the right, but not the obligation, to buy or sell an underlying asset at an agreed-upon price and date.
Call vs. Put Options
A call option gives you the right to buy an asset at a specific price within a specific timeframe. A put option gives you the right to sell an asset at a specific price within a specific timeframe.
Why Trade Options?
- Leverage your capital
- Hedge your existing portfolio against market downturns
- Generate income through strategies like covered calls
Before you dive in, make sure you understand the risks. Unlike stocks, options can expire worthless.