The Low Risk Option Strategy

With low risk option strategy you want to risk a limited capital in your trade. Because you have a limited risk trade your profit is capped as well. Does buying option has more or less risk?  Contrary to commonly accepted beliefs, selling options in a controlled manner is less risky than buying options. Two out of three times you can […]

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Defined Risk Strategy

With Defined Risk Strategy you use several combinations of stock options to make profit where you’re the risk is limited. Defined Risk strategies are known as vertical spreads. Traders can choose from many strategies available to set up a trade. You can enter a trade by simply buying or selling a position and taking more risk, or you may employ […]

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How to benefit from Covered Puts

Traders can profit in a declining market by selling covered puts.  Put options give the option buyer rights to sell stock to the option seller for a certain price.  Traders using put options when they think the stock’s price will go down. You can cover puts when you sell (short) an equal amount of stock. It is therefore considered a […]

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Benefit of Defined Risk Strategies

Traders have to ask themselves ‘Do I want to risk much in undefined strategies or do I want to risk less and use defined risk strategies?’. When you Trade small risks strategies it has small profits. If you want to risk more it comes with bigger profits. What you do and the profits you make all depends upon the amount […]

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