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Options made simple: A beginner's guide to trading options for success by Jacqueline Clarke

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Chapter 8: Choosing your option strategy

In this chapter we will look at the key factors you need to consider when choosing an option strategy. When trading shares, you really have the choice to buy, then sell or hold your position. With options there are many more choices, each with different risks and opportunities.

Regardless of the strategy you choose, your objective will be to either make a profit, or limit a potential loss. In pursuit of these aims, as a buyer of options you seek to purchase your option at the lowest price possible, and then sell it (or exercise it) at the highest price possible. As an option writer, you work directly against the buyers in seeking to sell your options at the highest price possible, and then close them ...

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