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What is OPTION? To me, it means
CHOICES. Many wonderful investment tools are contained in this single
word. I believe it is worth our time to learn more about option trading
and find a way to manage our money more effectively.
Option gives us choices to profit in all three
market conditions: up, down and sideway. However, it is not as easy as it
may look and that is why learning how to trade option is vital. Two main
vehicles in option trading are CALL and PUT. Call and put are opposite
trading vehicles. Call moves with the stock and put moves against it. If
we know how to put them together in a right combination, it is even a
more wonderful tool to trade. Single long call and long put trading is
called basic option trading. Multiple call and put trading is called
advanced option trading. The trick is finding the best combination of call/put
and making it the best trading strategy for us. Every trader is different
and there is no “universal formula” that works for every single trader.
Regardless of how wonderful investment tools
option provides, we are still the most important element for our
financial success. Option is exactly what it is: It gives us choices and
it is up to us to make the best of those choices.
Dennis Phan 潘家墉
13
January 2009
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