Option Trading ❲2024❳

: The cost you pay (as a buyer) or receive (as a seller) for the contract.

: You sell a put and set aside enough cash to buy the stock if the price falls to the strike price, effectively getting paid to wait for a better entry point. Risk vs. Reward

: You buy a call if you expect the stock price to rise. Your risk is limited to the premium paid, but potential profit is theoretically unlimited. OPTION TRADING

: The date the contract expires. If not used by then, it usually becomes worthless.

: Risk is strictly limited to the premium paid. However, options are time-sensitive; if the stock doesn't move as expected before expiration, the entire investment can be lost. : The cost you pay (as a buyer)

: You own the stock and sell a call against it. This generates immediate income (the premium) but caps your potential profit if the stock price soars.

: A Call gives you the right to buy; a Put gives you the right to sell. Reward : You buy a call if you

: You receive the premium upfront, but you take on the obligation to fulfill the contract. Selling "naked" (without owning the stock or cash) carries potentially unlimited risk if the market moves sharply against you.