Stock options - Managing risk or speculating? | Option strategies | Options trading | Risk mgmt.

There are several well-known option strategies used by traders and investors to manage risk and capitalize on various market conditions. Here are some of the most popular option strategies:

Covered Call: Involves buying a stock and selling a call option against it. It's a conservative strategy used to generate income, where the potential profit is limited but the risk is reduced by owning the underlying stock.

Protective Put: Involves buying a put option to protect an existing long position in a stock. It acts as insurance against potential downside moves in the stock's price.

Long Straddle: Involves buying both a call option and a put option with the same strike price and expiration date. This strategy profits from significant price movements in either direction.

Long Strangle: Similar to the long straddle, but the call and put options have different strike prices. It also profits from significant price moves but requires a larger move compared to the long straddle to be profitable.

#investing #trading #options #optionstrading #optionsstrategy #optionpricing #blackscholesformula #shorts