Options trading is a way to control stocks with less capital. Options are contracts that give investors rights but not obligations.
**Two main types of options**
– **Call options:** Profit from upside potential. Example: Buying a call on Apple if you believe its stock will increase.
– **Put options:** Profit from downside protection. Example: Buying a put on Tesla if you expect a decline.
**Why trade options?**
– Leverage: agnc investment market analysis control large positions with small capital.
– Insurance against downturns.
– Flexibility: profit in rising, falling, or sideways markets.
**Risks of options trading**
– Not suitable for everyone.
– Leverage magnifies risks.
– Options expire worthless if misjudged.
**Conclusion**
Options are tools for skilled investors. By learning calls, puts, spreads, and hedges, investors can diversify strategies. But discipline and education are essential.
