The option tricks SCECRETS

 

The option tricks SCECRETS 

 tricks SCECRETS 

Traders often jump into trading options with little understanding of the options strategies that are available to them. There are many options strategies that both limit risk and maximize return. With a little effort, traders can learn how to take advantage of the flexibility and power that stock options can provide

An option buyer can make a substantial return on investment if the option trade works out. This is because a stock price can move significantly beyond the strike price. For this reason, option buyers often have greater (even unlimited) profit potential .

Basics of Option Profitability

A call option buyer stands to make a profit if the underlying asset, let's say a stock, rises above the strike price before expiry. A put option buyer makes a profit if the price falls below the strike price before the expiration. 

The exact amount of profit depends on the difference between the stock price and the option strike price at expiration or when the option position is closed.