Option is among the most popular vehicles for traders, because their price can move fast, making
(or losing) a lot of money quickly. Option trading strategies can range
from quite simple to very complex, with a variety of payoffs and
sometimes odd names. (Iron condor, anyone?)
Regardless of their complexity, all option strategies are based on the two basic types of
option: the call and the put. Below are 3 popular strategies, a
breakdown of their reward and risk and when a trader might leverage them
for their next investment. While these strategies are fairly
straightforward, they can make a trader a lot of money — but they aren’t
risk-free.
Check out this article: Option Trading For Beginners - Best 3 Step Strategy.