The beauty of the options is its tremendous flexibility. You can trade directional or non-directional. You can set your timeframe. You can set your risk/reward and probability of success based on your personal risk tolerance. Basic option trading strategies can help you protect your portfolio or generate income from your stock positions.

Options are contracts that give the buyer the right to purchase or sell a specific security at a specific price during a specific time period. The contract also obligates the seller to meet the terms of delivery if the contract right is exercised by the buyer.

The investor who buys the contract is called the "buyer" or "holder". The buyer is also said to be "long" the option or to have a "long position" in the option. The investor who sells the contract is called the "seller" or "writer". The writer is also said to be "short" the option or to have a "short position" in the option.

Get more detailed information on options trading.

More SogoTrade Educational resources:
-Options Education Podcast, The Options Boot Camp. This podcast is designed to cover a wide variety of topics from basic concepts to more advanced strategies.
Click here for podcast.
- The New SogoTrade Blog - The SogoTrade Blog empowers customers by informing and educating them about the latest trading issues.
Click here for Sogoblog.

Important Note: Options involve risk and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options.