If you’re thinking about getting into trading, or you’re dabbling in it right now, here are some common questions that come up in trading stock option every day.
And these aren’t simply theoretical questions. Each one represents a decision you will have to make at some point during your stock option trading career. Answer wrong, and the chances are good you’ll find yourself out of the money more times than you want to be.
Give yourself a quick quiz. Do you know the correct answer to Top 12 Trading Option Questions?
When do you get your premium? And does the receipt of your premium mean that you are “in the money?”
Should your broker be charging you interest when you write Puts?
What’s the difference between Naked Puts and Covered Calls?
Is there a reason you should write Naked Puts instead of Covered Calls?
When should you write Cash Secured Puts? And when should you never write them?
How do you factor in Time Decay when selling Covered Calls?
What’s the best stock option strategy for hedging Naked Puts?
Should you ever close a Naked Put Early?
What’s the best stop-loss trading stock option strategy?
Does it make sense to reinvest dividends?
How do reinvested dividends impact your cost basis?
What kind of trading strategy involves selling Covered Puts?
All of the questions have simple but important answers. And knowing those answers is what makes the difference between an option trading expert, and someone who is simply throwing money into the market and hoping for the best.
Which category are you in? If you’re thinking that you’re closer to the “throwing money into the market” side of the question, rather than being able to call yourself an option trading expert, don’t be embarrassed. Everyone starts out making mistakes, and everyone, even the most experienced stock option trading experts, can always learn something new.
Andy “ROI” Huang
To learn more trading strategies visit http://stock-options-tradings.com/.
