THE OPTIONS COURSE- The Big Picture
THE OPTIONS COURSE The Big Picture OPTIONS Options are probably the most versatile trading instrument ever invented. They provide a high-leverage approach to trading that can significantly limit the overall risk of a trade, especially when combined with stock or futures. As a result, understanding how to develop profitable strategies using options can be extremely rewarding, both personally and finan cially. The key is to develop an appreciation about how these investment vehicles work, what risks are involved, and the vast reward potential that can be unleashed with well-conceived and time-tested trading strategies. First, it is important to differentiate between futures and options. A futures contract is a legally binding agreement that gives the holder the right to actually buy (and take delivery of) or sell (be obligated to de liver) a commodity or financial instrument at a specific price. In contrast, purchasing an option is the right, but not the ob