The Greatest Stock Trading Tips for Stock Option
An option is said to be a contract, which gives the buyer the right, but not the obligation, to buy or sell specified quantity of the underlying assets(these are financial instruments such as stock, futures, commodity(wheat/rice/cotton/gold/silver/bonds etc) at a specific (strike) price on or before expiry date.
The underlying may be commodities like wheat/ rice/ cotton/ gold/ oil or financial instruments like equity stocks/ stock index/ bonds etc.
In option trading, the buying and selling is done at premium price. And this is also called as safe trading because a trader is trading in option. And the capital which is invested in the option trading is comparatively at low risk with respect to capital which is invested in equity cash and commodity. This means a trader can start trading with a small amount and with low risk in the option segment of share market.
Two types of strategy is followed in option trading:
1.Call:- A stock option provider gives Buy Call option tip to a trader to buy call option when there is a bullish mode of the market.
2.Put:- A stock tips provider gives Buy Put option tip to a trader to buy Put option when there is a bearish mode of the market.
A stock market depends on sentiments such as any awaited news or merging of companies or any type of news. A researches utilizes the fundamental, technical and sentiments of the market to provide 85-90% accuracy in the calls which they provide to the traders. Hence it is recommended to take advise from share market experts to earn a very good profit. Because option trading is that segment in share market in which a trader can earn a very good profit by using 90-95% accurate stock option tips. Along with this a trader is also recommended to play safe in this market to minimize risk and earn high returns.