Before taking part in options trading, you need to know that it has a lot of benefits hence a lot of income in the world stock market. The only thing that you should do is to follow the right strategy to get the benefits that are there. You get to have a lot of option trading strategies that you can pick as an investor hence the best thing about it. The only thing that determines the options trading strategy that you should pick is the impression that you have in the direction of the stock price movement. Some of the option income strategies that you can get in use most of the time include neutral, bearish, and bullish strategies. You need to know that it is wise to have a bearish o bullish strategy when you know that the stock price can go either way. However, you need to go with a neutral strategy when you do not have any idea of the impression of the direction of the stock price.
In the case where you are expecting the stock price to shoot up, you need to know that the best strategy option to go with is bullish. When you are dealing with a bullish strategy, you need to know that it is important to look at some of the most important factors to be on a safer side. Some of the things that you need to have at the back of your head when dealing with bullish strategy are the period that the price is going to stay up and the rally and the amount that the stock price can increase. Call buying strategy, short put strategy, and bull put spread are some of the most commonly used bullish strategy that you can get in the market these days. The only condition that can ensure that you have a lot of money when using a bullish strategy is for the stock price to not to go down. On the other hand, you need to know that the bearish options strategy is one of the best to use when you think that the impression on stock price is going down. Some of the bearish strategies that you need to know you can get in the market these days include short synthetic, call bear spread, and long put. You also need to learn about neutral trading strategies that include butterfly and straddle to be on a safer side. Find out more details in relation to this topic here: https://en.wikipedia.org/wiki/Trading_strategy.
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