Options trading allows investors to buy and sell contracts that give the holder the right to buy or sell an underlying asset at a specified price within a certain timeframe. Investors can use options to speculate on the direction of an asset’s price or to hedge against downside risk.
There are two types of options:
Call options give the holder the right to buy an underlying asset at a specified price, while put options give the holder the right to sell an underlying asset at a specified price. Options can be traded through most brokerage accounts on exchanges, or over-the-counter (OTC).
Options trading is a versatile strategy that can be used to speculate on the direction of an asset’s price, generate additional portfolio income, or hedge against downside risk. For example, investors who are bullish on an asset can use call options to buy the asset at a lower price than its future potential. Similarly, investors who are bearish on an asset can use put options to sell the asset at a higher price than it would trade for in the open market.
Options can also be used to hedge downside risk. For example, an investor who owns a stock may use options to hedge against the risk of the stock declining in value. By buying put options, the investor can protect their downside risk.
Many will say that trading options is risky. However, the risks are similar to trading stocks. Investors should consider trading options only on underlying securities they’d like to own while considering the probabilities of a profitable outcome.
I break down a structured options income approach built around selling 10-delta puts and stacking probability in a disciplined cycle. The focus is on creating repeatable weekly income through staggered trades rather than chasing single high-risk outcomes. By combining assignment management, early exits, and structured positioning, this strategy aims to turn volatility into a controlled … Read more
Cash-secured puts can be a smart way to generate income or buy stocks at lower effective prices, but the biggest mistake beginners make is chasing the highest premium. This guide explains how to use an options scanner to filter for higher-quality cash-secured put opportunities based on stock quality, liquidity, probability, expiration, implied volatility, and risk, … Read more
Are you thinking of selling monthly covered calls for weekly or monthly income? If so, you came to the right place for this options trading strategy. Of course, if you landed here by accident, this article will blow your mind. In my opinion, selling covered calls is one of the most conservative income trading strategies … Read more
A long straddle is an options trading strategy that involves buying a call and a put option with the same strike price and expiration date. The trade is profitable if the underlying asset’s price move exceeds the total premium paid for the options. We say “long” because we are buying the options. The goal of … Read more
While many traders use options as a direct trading instrument to leverage stock returns, they can effectively hedge and manage the risks of a trader’s equity portfolio, supplementing their investment strategy. This means that when an investor uses the right tools at the right time, they can effectively limit their portfolio losses. This informational article outlines … Read more
Are you looking to trade stocks or options and wondering about the differences between Robinhood vs. Webull? Indeed, there are endless options for investing your hard-earned money. For example, some investors use an adviser, while others prefer doing it themselves with a low-cost brokerage such as Etrade or Schwab. However, startup brokerages such as Robinhood … Read more
Have you heard about LEAPS options trading strategies and wondered what they are and how they work? Or maybe you found this after reading an article, watching a video about leaps options, or trading in general and wanted something more – maybe something that made more sense to you. Even in 2026, buying and selling leaps … Read more
For most asset classes, trading volatility is relatively straightforward. All it takes is to observe the asset’s price change over time and determine a suitable buy point and sell point. However, for options trading, volatility isn’t that simple. This is because options traders do not directly buy the security; instead, they purchase a derivative contract … Read more
Wondering how to sell credit spreads profitably? Have you tried to sell options but got frustrated at how much money or margin you need in your account? If you want to sell put options, say on Tesla, you’ll need to be able to buy 100 shares of tesla before you can even start selling options … Read more
Are you thinking of selling put options to make some additional weekly or monthly income? If so, you came to the right place. In this article, I’m going to cover what put options are, how they work, offer some analogies, and finally, real examples. By the end of the guide, you’ll be ready to start … Read more
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