Option trading strategies for beginners
@rat boy:
1. Intro strategy Options trading strategy is a method of investing where you buy a call option and sell a put option at the same time. When you do this, you have effectively bought a contract that gives you the right to purchase shares at a certain price (the strike price) within a specific period of time. You then sell a contract that gives you a right to sell those shares at a lower price than what they were purchased at. In essence, you are selling insurance on the stock. If the stock goes down, you make money; if it goes up, you lose money. 2. Put-Call Parity Put-call parity states that if you own both a call option and a put option on the same underlying security, then the value of the options should be equal. This means that if you own a $100 call option and a $100 put option on the