Options Trading for Beginners: 8 Strategies Plus Advice from Financial Experts

Options trading for beginners might seem confusing, but it can be a money-making strategy to add to your investing toolkit if you’re an experienced trader.

Here are eight of the most common options strategies to learn about if you’re considering this type of investing. 

1. Buying Calls

Buying calls is one of the most common option trading strategies. When you buy a call option, you gain the right to purchase shares of a stock at the strike price before the expiration date.

2. Covered Calls

Covered calls are the other side of the call option transaction. A covered call is when an investor owns underlying security and then sells call options on them.

The call is “covered” because if the buyer of the call option chooses to exercise their options, the seller is “covered” because they can deliver the shares.

3. Long Straddles

If you're unsure whether a stock will go up or down, but you're convinced that it will experience a lot of short-term movement, employ the long straddle option trading strategy.

4. Buying Puts 

Traders who think the price of a stock will fall can use a long put strategy. The term “long” can be confusing in this context, but it just refers to the act of the trader buying an option and hoping to profit from it in the future.

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