Trading Stock Options For Dummies

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Option trading is a type of securities trading that involves a contract between a buyer too a seller. The contract gives the buyer the right, simply not the obligation, to purchase or sell an underlying asset at a specified price inside a sure fourth dimension flow. 

Option trading is a versatile mode to merchandise. You tin purpose options to pursue a number of unlike strategies, including: 

-Speculation: You tin function options to bet on the management of a stock, commodity, or other asset. 

-Hedging: You can purpose options to start the take a chance of owning a stock or other asset. 

-Income generation: You tin can use options to generate income from an underlying asset that y'all already ain. 

Options are a type of derivative, which way they derive their value from an underlying property. The about mutual underlying assets are stocks, commodities, currencies, in addition to indexes.