The risk management and position trading are the two major areas where options are considered to be the perfect tool. But using these tools in the right way is the most important thing that can help you make the most out of these tools. There are many different kinds of options available for you if you want to go for the options trading but you should understand the functionality of the options before investing your money.
The call and put are the two major types of options that enable the investor to use these options the way he wants. In this article, we are going to analyze the best options trading strategies that can provide you the maximum profit in 2018. Once you have understood the different strategies of options trading, you’d be able to limit the risk and maximize return.
You can learn to make use of these strategies by making some effort. Here are the best options trading strategies that you can use in 2018.
You can choose to engage in a basic buy-write or covered call strategy instead of purchasing a naked call option. In this strategy, you can write a call option on the assets after purchasing them. Make sure that you keep in mind the assets of a call option when you are setting up the volume of assets. When investors have a neutral opinion on the assets, they can use this position.
Cash-secured naked put writing
It is considered to be the best options trading strategy as it helps you make the most of your investment. You need to carefully understand the market before investing your money. This strategy keeps you completely secure in different circumstances.
The collar is also known as the covered call position but the addition of a put is the distinctive feature in this strategy. The risks of losing your money are reduced when you consider using the collar strategy. However, the profits that you are going to earn from this investment are limited but the performance of the options may make you feel satisfied and relaxed.
It is the point where you buy one call or put option while selling another. The expiration of both the options is the same. This strategy is known as the credit spread. Thus, you purchase a less expensive option while selling an expensive one. The profits and losses in this strategy are very limited.
This is a combination of one put credit spread and one call credit spread. The situation in this strategy is similar to the credit spread because profits and losses in this strategy are also very limited. Here are some other options strategies of 2018.