OPTIONS TRADING: Complete Step-by-Step Guide to Become a Successful Trader, Making Profit with Stock and Forex Trading and Live Your Dream Life with Options Trading by Albert Montague

Author:Albert Montague [Montague, Albert]
Language: eng
Format: epub
Published: 2020-11-16T00:00:00+00:00

This is the opposite of stock exchanges, where you only need to consider changes in stock prices. The reduced time and changes in volatility are used exclusively for options trading. Although changes in the underlying stock price are the most important factors affecting most options, when formulating strategies, one must take into account the effects of decline over time and any changes in the volatility of the underlying stock price—options trading.

Price fluctuation

The most important factor that affects the option price is the change in the underlying stock price. Therefore, you must form an opinion on the movement of basic stock market prices. Due to the time limit of trading options, you must also have an image of the underlying stock price movement within a specific period, and keep the option expiration time consistent with that period.

You can use basic analysis, technical analysis, or a combination of the two to determine your views on basic stock price movements. The method you use to form your opinion has nothing to do with choosing an option strategy, as long as you can reflect on price changes during the option's limited life.

When choosing an option strategy based on your views on the underlying stock price movement, you can use the following general guidelines:

If you expect the market price of the underlying stock to fluctuate significantly, call options may be an appropriate strategy.

If you do not want the market price of the underlying stock to fluctuate significantly, then listed options may be a suitable strategy.

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