Options trading is a financial strategy that involves buying and selling contracts granting the right (but not the obligation) to buy or sell an underlying asset at a predetermined price within a specific time frame.
Option trading enables traders to speculate on price movements, hedge against potential losses, generate income, or employ various strategies to capitalize on market conditions.
There are two types of options: call and put options. A call option gives holder the right to buy the underlying asset at strike price, while a put option gives holder the right to sell the underlying asset at strike price.
Individuals who have a brokerage account and meet the minimum age and financial requirements set by their respective country's regulatory authorities are eligible for options trading.
Some popular options trading strategies includes, Covered Call, Protective Put, Long Straddle, Long Strangle, Bull Call Spread, Bear Put Spread, Iron Condor, Covered Put, Collar Strategy and more.