How to Use Option Trading Strategies in any
Market Situation
Option strategies are implemented by combining one or more option
positions and possibly an underlying stock position.
In other words, a trading strategy is a calculated way of using options
singly or in a combination, in order to make a profit from market movements.
Option strategies can give you a greater profit with less risk compared
with the traditional buying and selling of stock.
One vitally important thing to consider when investing is when to get out
and how. An effective exit strategy needs to be decided upon in
advance, and stuck to without allowing emotions to sway you.
There are many types of option trading strategies that can be applied,
depending on your opinion, or ‘prediction,’ of which direction the underlying
stock is going to move.
A guideline for picking the right stocks to go with the right options
strategies is available by reading “Options Strategies for Different Stock
Styles”. The various stock movements are taken into account – bullish and
bearish – as well as major moves, or slower, moderate moves, in either
direction - and a strategy that can be applied to each of these movements.
