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What is Options Trading? How to Trade Options

Options trading is a type of securities trading in which the buyer of an options contract has the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a specified date. There are two main types of options: call options and put options. A call option gives the holder the right to buy an underlying asset, while a put option gives the holder the right to sell an underlying asset.

How to trade Options?

To trade options, an investor typically needs to open an account with a brokerage that offers options trading. Once the account is open, the investor can buy and sell options contracts just like stocks. It is important to note that trading options can be risky and it is important for investors to fully understand the risks and mechanics of options trading before getting into it.

One can trade options by buying or selling options contracts, it can be done through various strategies such as buying a call option, selling a put option, or using a combination of both. It's important to note that options trading is not suitable for all investors, it's important to have an understanding of the underlying asset and the market conditions.

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