Four Basic Options Trading Strategies
Welcome back to moomoo![]()
! I'm Options Explorer![]()
, and in today's episode of [Options Notes], I'll be discussing the price trend outlook for the four basic option strategies.
If you expect the stock price to rise, you can consider buying a call option.
If you anticipate that the stock price will increase but there is strong resistance above, you might want to consider selling a put option instead.
On the other hand, if you believe that the stock price will drop, you may consider buying a put option.
If you predict that the stock will decrease but there is a tested support level below, you can consider selling a call option.
Let's learn about the trend outlook of these strategies together.
Note: Options trading entails significant risk and is not appropriate for all customers. For naked calls, the risk is potentially unlimited since the underlying asset can theoretically rise infinitely. For naked puts, the risk is substantial, as the underlying asset price can theoretically decrease to zero.
That's what today's lesson is all about. Please leave a comment if you have any questions or thoughts about it.
Don't forget to follow us to stay up-to-date on all things related to options trading. For more information on options learning, you can click on the image below to follow me immediately.
Risk Statement
Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Opening new options positions close to or on their expiration date comes with substantial risk of losses for reasons that include potential volatility of the underlying security and limited time to expiration. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request.
This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty as to its adequacy, completeness, accuracy or timeliness for any particular purpose of the above content.
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