Options trading has become one of the most preferred investment mechanisms in recent years. For newbies, it can be a daunting task. There's too much information available in the market, which often needs to be clarified.
1. Strike Price: The pre-determined price agreed upon while purchasing the options contract.
2. Exercise Date: The date until which the holder of the options has the right to exercise it at the exercise price. Beyond this date, the possibilities are generally rendered worthless.
1. Open an Options Trading Account
If you want to trade options, you must have an options trading account. Compared to a simple brokerage account for stock trading, an options trading account usually requires greater capital involvement.