Although options trading carries a reputation for being the exclusive domain of professional traders, they’re actually powerful tools for everyday investors, including beginners. Once the basic concepts are grasped, these derivative contracts offer flexibility and most significantly, risk management.
To become a successful options trader, one must first understand the lay of the land. As Sun Tzu wrote, “[e]very battle is won before it’s ever fought.” Options are the same way. To use a sports analogy, before a football team decides to kick a field goal, the coaching staff will at least check the wind speed and direction. Kicking into the wind is a huge obstacle compared to when it’s at your back.
