Trading

Ths page describes the important trading terms, concepts and strategies that I know and try to use in personally, as well as automate via A better Trader.

Options

You have to study options terminology carefully before you can even understand them.

Options give you the option (the right but not obligation) to perform a trade in the future at a specific price.

Call = right to buy Put = right to sell

Open = the start of the option (you will pay a "premium" to have the option to trade in the future) Close = the end of the option (you will execute the option you previously purchased)

I am mostly interested in using options to short a stock with reduced risk. Directly shorting a stock means that you may have to buy it later at whatever the market value is, which is potentially unlimited. But