Options Trading – Beyond Buying Calls and Puts
Introduction
Options trading is often misunderstood. Many beginners focus only on buying options without understanding Greeks, implied volatility, and risk exposure.
True options mastery requires deeper knowledge.
The Foundation of Options Trading
Before trading options, one must understand:
- Volatility cycles
- Option Greeks (Delta, Gamma, Theta, Vega)
- Implied volatility
- Time decay
Buying vs Selling Options
Option Buying
- Limited risk
- High reward potential
- Time-sensitive
Option Selling
- Higher probability
- Requires margin
- Risk management critical
Professional traders understand when to buy and when to sell.
Conclusion
Options trading becomes powerful when executed with structure, discipline, and proper risk frameworks.