Option Strategies - Introduction

Many investors will use options to manage risk or to establish more complex positions than simply directionally trading options by buying or selling puts and calls. In this chapter, we will review option hedging strategies as well as how and why to establish multiple option positions.



 



series 4 training -Securities Institute



Using Options As A Hedge


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RELATED TERMS
  1. Call On A Put

    One of the four types of compound options, this is a call option ...
  2. Sell To Open

    A phrase used by many brokerages to represent the opening of ...
  3. Outright Option

    An option that is bought or sold by itself; in other words, the ...
  4. Exotic Option

    An option that differs from common American or European options ...
  5. Option Class

    The set of all the call options or all the put options for a ...
  6. Spread

    1. The difference between the bid and the ask price of a security ...
RELATED FAQS
  1. Do options make more sense during bull or bear markets?

    Understand how options may be used in both bullish and bearish markets, and learn the basics of options pricing and certain ... Read Answer >>
  2. Are put options more difficult to trade than call options?

    Learn about the difficulty of trading both call and put options. Explore how put options earn profits with underlying assets ... Read Answer >>
  3. When does one sell a put option, and when does one sell a call option?

    The incorporation of options into all types of investment strategies has quickly grown in popularity among individual investors. ... Read Answer >>
  4. Are there any risks involved in trading put options through a traditional broker?

    Explore put option trading and different put option strategies. Learn the difference between traditional, online and direct ... Read Answer >>
  5. What is index option trading and how does it work?

    Learn about stock index options, including differences between single stock options and index options, and understand different ... Read Answer >>
  6. How can derivatives be used to earn income?

    Learn how option selling strategies can be used to collect premium amounts as income, and understand how selling covered ... Read Answer >>
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