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Some simple trading strategy in Options

Options trading are though more profitable than stock trading, but it is a lot more risky than stock trading, but still is preferred because of its profit. Option trading provides many a huge variety of strategies and all of them have their own risks. Broker’s fee is higher in options trading but it is not considered due to its high profitability.

Options trading were not so risky but the traders made it so because of their personal greedy habits. They tried to achieve high return rates at a minimum time which made it super risky. The main rule for high profits is to make a strategy of your “own” and keep it using consistently and clearly defined rules.

Some simple trading strategies in options are given below.

·Selling Naked Puts
     This strategy is used when there is high margin requirement than that of credit spreads. This strategy has the lowest risk profile and is used where similar returns are needed. The similar thing with credit spread is that you get your profit up front.

·Selling Credit Spreads
This strategy is used to grow portfolio by 10-15 % per month, without any work in half an hour a week. This strategy is for simple traders because of simplicity of its action. It is not supportive for analyzers and hyperactive traders. Another benefit is that it is very profitable.

·Selling Covered calls
This strategy is for those traders who store stock for business purposes and not for sentimental purposes. By selling your stock occasionally you can earn a lot of profit. In this way you can effectively reduce the cost of the stock.

·Deep in the money Options
This is the most effective strategy that enables you to buy the stock at half its price and then sell it which makes double profit. As this strategy is short term reaching from 3 to 5 days normally so you have not to worry about any dividends or loan notes or any other complex factor but still you make profit because the price of stock goes on increasing with the price of market.
·Complex Strategies
These strategies are the most profitable of all. So traders mostly prefer these strategies like strangles, straddles, iron condors, butterflies etc. But these strategies do have a disadvantage of being expensive either by the expensive options or high broker fee.

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Trade In Call and Put Option
Trade In Call and Put Option