Whether you are a conservative or growth-oriented investor, or even a short-term, aggressive trader, your broker can help you select an appropriate options strategy. The strategies presented in this strategy review do not cover all, or even a significant number, of the possible strategies utilizing options. These are the most basic strategies, however, and will serve well as building blocks for more complex strategies.

Despite their many benefits, options are not suitable for all investors. Individuals should not enter into option transactions until they have read and understood the risk disclosure document, Characteristics and Risks of Standardized Options, which outlines the purposes and risks thereof.

Further, if you have only limited, or no experience with options, or have only a limited understanding of the terms of option contracts and basic option pricing theory, you should examine closely another industry document, Understanding Stock Options.

An investor who desires to utilize options should have well-defined investment objectives suited to his particular financial situation and a plan for achieving these objectives.

Although we have outlined for educational and informational purposes the basic options strategies that investors may find useful, this discussion is in no way complete. We encourage investors to fully understand the risks associated with options trading by thoroughly reading the Characteristics and Risks of Standardized Options and asking questions of your broker. For your information, please read this website's Disclaimer.

 
Click on the image for an explanation of its corresponding strategy.