Options trading is an advanced investing tool. Options are agreements linked to stock prices.
**Two main types of options**
– **Call options:** Give the right to buy a stock at a fixed price. Example: Buying a call on Apple if you believe its stock will increase.
– **Put options:** Give the right to sell at a fixed price. Example: Buying a put on Tesla if you expect a decline.
**Why trade options?**
– Enhances returns.
– Hedging: protect portfolios from losses.
– Customizable positions.
**Risks of options trading**
– Not suitable for everyone.
– Entire investment can vanish.
– Options expire worthless if misjudged.
**Conclusion**
Options are not for beginners without study. By learning calls, puts, nextera energy financial performance spreads, and hedges, investors can enhance returns. But discipline and education are essential.
