These are the most common option strategies that you should know as they allow you to make bets on the market OTHER than traditional up or down.
With options, you can bet that the stock market will stay above or below a certain price level by this coming Friday. In the event it doesn’t happen, you get to collect your max profit — effectively your insurance premium.
Selling lotto tickets can make you a lot richer than buying lotto tickets — even when the payout of lotto tickets is so high — it’s because the probability is so low.
Mimicking this idea of selling lotto tickets and selling insurance premium – is what we are after when we sell options.
Make sure you have permissions from your broker to trade options – this typically requires filling out an extra form.