In stock trading, traders avoid spreads of any kind because limiting losses can also limit gains. It is a must to trade in a realistic way. If you trade a three-fold gain, which is the strategy that requires only little up-front capital, you strictly limit losses by neutralizing declining time value while opening the possibility [...]
Before we can begin to trade in options, we need to understand the basic terminology of these sophisticated financial instruments so that we can start to interpret the mass of figures which appear, when an option chain appears on the screen.
Each option has a so called strike price. This is the price at which the [...]
Option is a very popular derivative because its price is cheaper than other derivative such as future. Blue chip stock is a very volatile stock but it is very expensive. However, by buying option of the blue chip stock, we could earn profit just similarly like buying the stock. Investing and trading option seem to [...]