But because commissions provide a convenient side-by-side comparison, they often are the first things people look at when picking an options broker. The Bottom Line While the wide range of strike prices and expirations may make it challenging for an inexperienced investor to zero in on a specific option, the six steps outlined here follow a logical thought process that may help in selecting an option to trade. Previous How to Trade Options. If the stock drops, Bateman is hedged, as the gain on the option will offset the loss in the stock. Six Steps to Finding the Right Option We start with the assumption that you have already identified the financial asset—such as a stock or ETF—you wish to trade using options. Once you have identified the underlying asset to trade, here are the six steps for finding the right option.
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Opening an options trading account
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Options Trading 101
Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options. Copies of this document may be obtained from your broker, from any exchange on which options are traded or by contacting The Options Clearing Corporation, S. Franklin Street, Suite , Chicago, IL And these are the 10 best stocks to buy right now for How to Trade Options; Market Insight. Gadgets, Smartphones & Tech; it’s simply going to do slightly worse than a good stock. Some good stocks for options trading that I and my mentoring students regularly employ include: GOOG, IBM, AAPL, NFLX and PCLN, to name a few. The best stocks to use will be the higher-priced stocked, generally over $ and many times many hundreds of dollars, because those stocks generate larger option premiums due to their size.