A Quick and Easy Way To Learn To Trade Options

Many people want to learn to trade options, but feel like a fish-out-of-water when they hear all of the technical jargon. What is a “put”? Who is a “holder”? Now you can remove the veil of mystery from options trading terms by reading this clear and concise WikiHow article, entitled: How To Get Started Trading Options. In the article, trade options are explained in simple, understandable language designed for a complete novice.

An option is the right to buy or sell an asset at a certain price and by a certain date. Let’s say you want to buy a guitar from a friend, and they want $1000 for it. If you don’t have the money to buy it right now, you could tell your friend “I’ll pay you $300 right now if you’ll hold the guitar for me for a month. If I don’t come up with the $1000 by then, you keep the $300 and can do whatever you want with the guitar.”

The guitar is the asset, and your right to buy it under those specific terms is an option. Now, if your friend discovers the guitar is worth $5000, they still have to sell it to you for $1000 because you have that right, and you’ll make a profit. If the guitar breaks, you probably won’t want to use $1000 to buy it, but you’ll lose the $300 you used to buy that option. Or, you could sell that option to someone else, perhaps someone who knows how to fix guitars!

That’s pretty much how trading options works, but it’s very complicated and risky in practice. The assets traded are usually stocks. This article will show you how to get started. Click this link to finish reading How to Get Started Trading Options.

Once you understand the basics, the article leads you through a step-by-step process so you can get started trading options and make money today.

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