If I start throwing out terminology like ‘long strangle’ and ‘long straddle’ are you going to know what I’m talking about? These are stock options strategies that can make you money if you know what moves to make. Many investors want to tap into options stock market because they know that while the stakes can be higher, the reward can be greater. Of course, not all options contracts are risky, but the ones that aren’t risky aren’t going to provide you with hefty returns.
Do you know any options strategies off the top of your head? The covered call is one you’ve likely heard of before. A covered call is when the security you’re going to purchase an options contract for is indeed purchased beforehand. Now you can see why you need to know what you’re doing. Then, you are allowed to write a covered call option, and this will help you protect your position.
Have you heard of a bull call spread? You know what a bull market is I’m sure, and this is what this strategy for options contracts represents, that you’re bullish about a particular security. You pick a two higher strike prices, and then you purchase two different kinds of contracts. This Excellent strategies for straddle Options is known as a ‘vertical spread.’ Then there is also the bear put spread strategy for stock options contracts.
These are just a few of the strategies for buying options contracts. There is also what is known as the protective collar, the married put, the iron condor and the butterfly spread. There might even be more strategies out there, but those are 10 that will keep you busy for awhile. Just be careful with your money and don’t take too many risks when you are buying stock options.