Options Strategies

Before you can understand options strategies, you first need to understand the difference between stocks and options.

Stocks vs Options

While you trade stocks in shares, you trade options in contracts. When you buy a single options contract, it controls 100 shares of stock. If you own 11 contracts, you control 1,100 shares of stock. Therefore, it's possible to control more stock in a company using options.

If you buy stocks, they don't expire. You own stocks until you sell them (hopefully at a higher price than what you bought them for) or they go out of business (which you hope never happens). On the other hand, options do expire. They are considered "time sensitive." An option always expires on the third Friday of the month. If you do not exit your option position before the option expires, it will expire worthless. When you purchase options, always consider the time factor.

Options are Traded Differently Than Stocks

Plenty of information exists in books, magazines, and on the Internet regarding stocks and how to trade them. Actually, fewer trading strategies exist for stocks than for options. BetterTrades helps teach you about the stock market and trading stocks, but its main focus is on helping students learn how to trade options and trade them safely (though you must understand that there are risks and you can lose money).

What's interesting, fun, and exciting about trading options is that you can use options strategies to trade profitably no matter what the market is doing - even in a stagnant or bear market.

We've provided an overview of each option trading strategy. These strategies are taught in depth by various coaches at BetterTrades. (You can visit BetterTrades.com for more information on our coaches.) You'll see that some strategies are basic, simple, while some are more complex. To become successful and make better trades, you need to know more than just the strategies. You also need to make sure your chosen strategy fits with the current market. For example, in a bull market, a trader would avoid using a bear call spread because it would be counterproductive. You?ll be glad to know that strategies exist for every type of market and every style of learner.

But please remember that although trading options can be profitable, trading them does carry risk. It is possible to lose all of your investment. So trade smart.