The Really Options Trading Basics series of articles was conceived with the idea of creating a tutorial that is practical and allows anyone to start buying and selling Options in days!

At the beginning of the series of articles, I introduced the steps to “buy to open” and “sell to close” a Call Option. A Call Option increases in value when the underlying stock price rises. Then there is the Put Option that increases in value when the underlying stock price falls. In summary,

This is the power of Options! When I buy Call Options, I can make money when the underlying stock price is rising. When I buy Put Options, I can make money when the underlying stock price is falling. With a combination of Call and Put Options, I can even make money when the stock price is neither rising or falling. So effectively, if I master Options and applying them timely, I can make money no matter which direction the stock price is heading!!!

This flexibility gives rise to some barriers of course. It is exactly this same flexibility that make Options difficult to learn. This flexibility also gives rise to the headache of when to apply which? We have got to be nimble in identifying which trend the stock is in and apply the right Options strategy aptly.

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