Home > Options Trading Basics
Selling Options
The other basic concept of profiting from options trading is by selling or writing options. The most popular method of selling options is the covered call write. The idea is to hope that the options you sold expire worthless so that you can collect the premiums. When it comes to selling options, one can be covered or uncovered (naked). You are covered when selling options if you have a corresponding position in the underlying stock. Being covered or naked can have a big impact on the risk/reward profile of the strategy you wish to implement. The four main forms of options writing are covered call writing, naked call writing, covered put writing and naked put writing.
Intermediate & Advanced Strategies
By combining the two basic concepts of buying and selling options, many strategies are available for trading in a variety of market conditions. The simplest to understand and implement are the basic options spreads. More complex strategies can also be employed by combining these basic spreads.
Altogether, there are quite a number of options trading strategies available to the investor and many of them come with exotic names. Here in this website, we have tutorials covering all known strategies and we have classified them under bullish strategies, bearish strategies and neutral (non-directional) strategies.
