Options trading involves buying and selling rights and obligations through derivative contracts called options. There are four types of options contracts: calls, which give the buyer the right to buy the underlying asset at a set price; puts, which give the buyer the right to sell the underlying asset; and writing calls and puts, which obligates the writer to buy or sell the underlying asset if assigned. Unlike traditional trading, options have an expiration date, so traders must consider time value and volatility, both of which impact the pricing of options. For more information on options trading, contact the author through email or social media.

1. Options Trading For Dummies
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Options Trading

2. Options Trading For Dummies
If you are new to options
trading, I would recommend
reading the following article
that might shed light on what
this topic is about.
Options trading is a type of derivative trading. It differs in
many ways from traditional trading forms such as stock
trading or forex trading.
The biggest difference is that you are not trading the
underlying itself (stock or currency) but you are trading a
derivative that is called option.
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3. What do you trade with then?
You only trade with rights and obligation. You can buy or
sell a right and you can buy or sell an obligation. You
either have the right to sell or buy, or you have the
obligation to buy or sell. So there are 4 types of actions in
options trading. The right to buy is called Call Option, the
right to sell is called Put Option.
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4. What is the risk?
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5. Time and Volatility
The other two factors that pretty much differ from
traditional trading is time and volatility. When you buy a
stock there is no time pressure.
When you buy a Call there is. It is because the Call
option will expire at some point in the future. So you have
to deal with Time Value.
Also volatility has a huge effect on options pricing, so you
need to understand that as well.
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6. Feel free to ask me!
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Email: gery@optionsrules.com
My webpage: http://www.optionsrules.com/
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