📘 Introduction: Why You Should Take Option Trading Seriously
Options trading is quickly becoming one of the most popular strategies in today’s financial world—and for good reason. 💹
It provides:
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🔁 Flexibility
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💸 Lower risk (when used wisely)
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🚀 High-reward potential
Unlike conventional stock trading, options allow you to hedge, speculate, or generate income, while controlling a larger position with less capital.
In this beginner-friendly tutorial, we’ll walk you through the fundamentals of options trading and show you how to start your journey toward becoming an option trading master.
📌 What Are Options in Trading?
Options are financial contracts that give you the right (but not obligation) to buy or sell an underlying asset (such as a stock or index) at a specified price before a certain date.
✌️ Two Basic Types of Options:
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Call Option 📈 – Gives you the right to buy at a fixed price
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Put Option 📉 – Gives you the right to sell at a fixed price
💡 Why Learn Option Trading?
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💼 Lower Capital Requirement: Control bigger positions with less money
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🔁 Versatility: Profit in bull, bear, or sideways markets
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🛡️ Hedging: Protect your portfolio from market crashes
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💰 Passive Income: Earn through covered calls, credit spreads, and more
🧠 Key Concepts You Need to Know
1️⃣ Strike Price & Expiry
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Strike Price: Price at which the option can be exercised
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Expiry Date: Last date the option can be used
2️⃣ Premium
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The cost you pay (or receive) to buy (or sell) an option
3️⃣ Moneyness: ITM, ATM, OTM
| Term | Meaning |
|---|---|
| ITM (In-the-Money) | Option has intrinsic value |
| ATM (At-the-Money) | Strike price = Market price |
| OTM (Out-of-the-Money) | No intrinsic value—only time value |
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