How to Trade Options in 4 Steps

What options to buy

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    Investing Top 10 Stocks for Trading Options Trading options instead of stocks can be a smart choice if you prefer to take an active, tactical role and you want to have flexibility in your investments.

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    Successful options trading requires you to have a talent for prediction, not to mention nerves of steel. However, not all options are created equal.

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    You can also take the other side of the trade and sell options to boost the odds what options to buy your favor. This creates an unpleasant effect known as slippage, in which a trade is executed at a price different than what you intended.

    Ideally, you should look for options that have as little bid-ask spread as possible, in order to maximize your chances of making a profit once the trade is complete. Most recently, the stock took a big leap after Google confirmed that it would partner with AMD for its new video game service Stadia. Shares plunged in November after worries about iPhone sales trendsand then again at the start of the year when CEO Tim Cook warned of cooling sales in the Chinese market.

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    Bank of America Bank of America [ NYSE: BAC ] stock is interesting for options traders because shares have historically been volatile in the short term, yet fairly stable in the long term. Short-term prospects look good, with the most recent earnings report outdoing expectations. Nevertheless, the company continues to grow in both users and revenue, although the figures are beginning to plateau in the U.

    The company announced that its quarterly earnings beat estimates, but also said that it would cut its production numbers due to reduced demand for its products.

    Every time. NerdWallet, Inc. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. They are not intended to provide investment advice.

    Shares are down significantly since a peak in summer The looming specter of tariffs also casts a shadow over the fate of Nvidia and its competitors. Boeing Boeing stock [ NYSE: BA ] cratered in March after the second fatal crash of its MAX aircraft in only five months, causing airlines and governments around the world to ground the entire fleet. After all, the 1 stock is the cream of the crop, even when markets crash.

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    Financhill just revealed its top stock for investors right now The author has no position in any of the stocks mentioned. Financhill has a disclosure policy.

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    The Bottom Line The strike price of an option is the price at which a put or call option can be exercised. It is also known as the exercise price.