Futures Lookup   Quote Chart Opinion Profile Markets Futures Forex Funds Signals Sectors My Quotes Education Member Sign-In: › Subscriber Login › Member Benefits Markets Overview: › Market Indices › Exchange Funds › Market Momentum › 52 Week Highs › 52 Week Lows › Volume Leaders › Percent Advances › Percent Declines › Price Advances › Price Declines › Price Volume › Volume Advances › Highs / Lows › What's Hot › What's Not  Stock Options  Market Snapshot  Rankings  Commentary  Education  Glossary › IB Times News › Funds › Signals › Sectors Options Education Featured Sponsor:  How to Use Options Options can be used in a variety of ways to profit from a rise or fall in the underlying market. The most basic strategies employ put and call options as a low capital means of garnering a profit on market movement. Options can also be used as insurance policies in a wide variety of trading scenarios. You probably have insurance on your car or house because it is the responsible and safe thing to do. Options provide the same kind of safety net for trades and investments. They also increase your leverage by enabling you to control the shares of a specific stock without tying up a large amount of capital in your trading account. The amazing versatility that an option offers in today's highly volatile markets is welcome relief from the uncertainties of traditional investing practices. Options can be used to offer protection from a decline in the market price of a long underlying stock or an increase in the market price of a short underlying stock. They can enable you to buy a stock at a lower price, sell a stock at a higher price, or create additional income against a long or short stock position. You can also use option strategies to profit from a move in the price of the underlying asset regardless of market direction. There are three general market directions: up, down, and sideways. It is important to assess potential market movement when you are placing a trade. If the market is going up, you can buy calls, sell puts or buy stocks. Do you have any other available choices? Yes, you can combine long and short options and underlying assets in a wide variety of strategies. These strategies limit your risk while taking advantage of market movement. The following tables show the variety of options strategies that can be applied to profit on market movement: Bullish Limited Risk Strategies Bullish High to Unlimited Risk Strategies Bearish Limited Risk Strategies Buy Call Buy Stock Buy Put Bull Call Spread Sell Put Bear Put Spread Bull Put Spread Covered Call Bear Call Spread Buy Call Ratio Backspread Call Ratio Spread Put Ratio Backspread Bearish High to Unlimited Risk Strategies Neutral Limited Risk Strategies Neutral High Unlimited Risk Strategies Sell Stock Long Straddle Short Straddle Sell Call Long Straddle Short Straddle Covered Put Long Synthetic Straddle Call Ratio Spread Put Ratio Spread Put Ratio Spread Long Butterfly Put Ratio Spread Long Condor Long Iron Butterfly It is of paramount importance to be creative with your trading. Creativity is rare in the stock and options market. That's why it's such a winning tactic. It has the potential to beat the next person down the street. You have a chance to look at different scenarios that they do not have the knowledge to construct. All you need to do is take one step above the next guy for you to start making money. Luckily the next person, typically, does not know how to trade creatively. Back to Top    Barchart Marketplace  »» Barchart.com © Copyright 2008, Barchart.com User agreement applies. Data provided by ddfplus and subject to terms of use and privacy policy. |  Webmaster Tools  |  Advertising  |  Suggestions Box  |  About Barchart.com  |  Support  | Press Ctrl+P to print this page   Data and information is provided for informational purposes only, and is not intended for trading purposes. Neither Barchart.com Inc. nor its data provider (ddfplus) shall be liable for any errors or delays in the content, or for any actions taken in reliance thereon. By accessing the Barchart.com Inc. web site, a user agrees not to redistribute the information found therein. Press Ctrl+D to bookmark this page - Set www2.barchart.com as your Home Page All Equities and Futures data is delayed according to exchange rules. NYSE and AMEX at least 20 minutes. Nasdaq at least 15 minutes. CME and CBOT at least 10 minutes. NYBOT, NYMEX and COMEX at least 30 minutes.