If you're considering options as part of your investment strategy, begin by applying for options trading in your account. Get an overview of basic options strategies, such as how to generate income with covered calls, or reduce risk with protective puts.
More and more investors are looking for trading strategies that can help generate additional income and protect against downside risk. That's why many are utilizing options as part of their investment strategy.
The covered call strategy may generate some income, however the strategy can limit the investor's participation in any appreciation of the underlying security and does little to limit downside risk.
The protective put strategy may help reduce risk, but there is a possibility of losing your entire investment in the option.
Please note: Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Investors must consider all relevant risk factors including their own personal financial situation before trading options.
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