Options Trading

Options trading has become very popular in recent years thanks to low-cost electronic trading, improved pricing models, and online analysis tools. They offer unique advantages like portfolio protection and additional income when used judiciously.

Options are derivatives contracts that give the buyer the right, but not the obligation, to either buy or sell a fixed amount of an underlying asset at a set price on or before the contract expires.
Used as a hedging device, options contracts can reduce risk for investors.

For speculators, options can offer lower-cost ways to go long or short the market with limited downside risk.

Options also give traders and investors more flexible and complex strategies, such as spread and combinations, that can be potentially profitable under any market scenario.