Options trading can be complicated more than stock trading. When you purchase a stock, you choose how many shares you want, and your broker fills the order at the current market price or at a limit price. Trading options needs some of these factors, as well as many others, including a more huge process for creating an account.
Consider the basic factors in an how to trade options:
When you take out an option, you’re purchasing a contract to buy or sell a stock, usually 100 shares of the stock per contract, at a pre-negotiated price by a certain date. In order to place the trade, you must make three strategic choices:
Determine which way you think the stock is going to move.
Guess how high or low the stock price will move from its prevailing price.
Decide the time frame during which the stock is likely to move.continue reading