Understanding the Basics of Options

Written by: Billy Williams

Options are a misunderstood investment tool but once understood by an individual investor it can be a very versatile investment tool. Options can be used to protect your portfolio, and they can help you pick up huge profits by controlling the stock of a company very cheaply. Plus, options offer strictly limited risk. If an option trade goes the wrong way, you won't lose more than your initial investment plus commissions.

So what are options? Options are a type of investment that gives you the right to buy or sell an underlying security at a certain price for a specified amount of time.

In other words, options give you the right to bet on the direction of a stock, but you are limited to that bet for a certain period

About The Author

Mr. Williams is businessman and veteran of Desert Storm who has been trading stocks, options, and futures for almost 15 years. He has extensive training in systemic trading and technical analysis along with the insight that comes from suffering the highs and lows from trading for many years. He likes to exchange ideas in a "stream of consciousness" which allows for open thought and education on how to improve trading skills with beginners and professional alike.
http://www.stockoptionsystem.com


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