vertical (or price) spread. In contrast, spreads with different expiration months are referred to as horizontal (or time) spreads. A position that uses a combination of different strike prices and expiration months is often called a diagonal spread. Regardless of the strategy used, a spread may result in an initial credit or debit, depending on which options (strikes and expiration dates) are bought and sold.

In bullish markets,

Options are the most versatile instruments - it require skill to trade them to achieve different objectives such as hedging against unfavorable market movement, speculating on the direction of the underlying stock or generating income on portfolio assets. Through the use of various combinations of calls, puts, and other financial instruments, the option trader can create a position that exactly fits his directional outlook for a specific issue and also conforms to his risk-reward attitude, experience level and capital requirements.

Some traders are very successful in generating wealth in trading options markets while statistic suggests the majority of retail traders lose money. Why does this happen? Because the average trader focuses primarily on options "buying" strategies and does not take advantage of the many other limited-risk techniques available. Buying a call is the basic method of options trading expecting an upward (price) movement in a particular stock before the option expires. It's a great tactic when used properly but many new investors do not understand how difficult it is to master. Statistics suggest that seventy per cents of options expire worthless.

Another way to participate options buying is through the use of a combination of long and short positions or a "spread." An option spread is a hedged trade that can reduce risk while at the same time limiting gains. Some spreads have different strike prices while others have different expiration dates and a few varieties include both. For example, a bull-call spread involves the simultaneous purchase and sale of call options with the same expiration date but with different strike prices. Since one strike is higher than the other, it is known as a vertical (or price) spread. In contrast, spreads with different expiration months are referred to as horizontal (or time) spreads. A position that uses a combination of different strike prices and expiration months is often called a diagonal spread. Regardless of the strategy used, a spread may result in an initial credit or debit, depending on which options (strikes and expiration dates) are bought and sold.

In bullish markets,

fic issue and also conforms to his risk-reward attitude, experience level and capital requirements.

Some traders are very successful in generating wealth in trading options markets while statistic suggests the majority of retail traders lose money. Why does this happen? Because the average trader focuses primarily on options "buying" strategies and does not take advantage of the many other limited-risk techniques available. Buying a call is the basic method of options trading expecting an upward (price) movement in a particular stock before the option expires. It's a great tactic when used properly but many new investors do not understand how difficult it is to master. Statistics suggest that seventy per cents of options expire worthless.

Another way to participate options buying is through the use of a combination of long and short positions or a "spread." An option spread is a hedged trade that can reduce risk while at the same time limiting gains. Some spreads have different strike prices while others have different expiration dates and a few varieties include both. For example, a bull-call spread involves the simultaneous purchase and sale of call options with the same expiration date but with different strike prices. Since one strike is higher than the other, it is known as a vertical (or price) spread. In contrast, spreads with different expiration months are referred to as horizontal (or time) spreads. A position that uses a combination of different strike prices and expiration months is often called a diagonal spread. Regardless of the strategy used, a spread may result in an initial credit or debit, depending on which options (strikes and expiration dates) are bought and sold.

In bullish markets,

ng a call is the basic method of options trading expecting an upward (price) movement in a particular stock before the option expires. It's a great tactic when used properly but many new investors do not understand how difficult it is to master. Statistics suggest that seventy per cents of options expire worthless.

Another way to participate options buying is through the use of a combination of long and short positions or a "spread." An option spread is a hedged trade that can reduce risk while at the same time limiting gains. Some spreads have different strike prices while others have different expiration dates and a few varieties include both. For example, a bull-call spread involves the simultaneous purchase and sale of call options with the same expiration date but with different strike prices. Since one strike is higher than the other, it is known as a vertical (or price) spread. In contrast, spreads with different expiration months are referred to as horizontal (or time) spreads. A position that uses a combination of different strike prices and expiration months is often called a diagonal spread. Regardless of the strategy used, a spread may result in an initial credit or debit, depending on which options (strikes and expiration dates) are bought and sold.

In bullish markets,

ad." An option spread is a hedged trade that can reduce risk while at the same time limiting gains. Some spreads have different strike prices while others have different expiration dates and a few varieties include both. For example, a bull-call spread involves the simultaneous purchase and sale of call options with the same expiration date but with different strike prices. Since one strike is higher than the other, it is known as a vertical (or price) spread. In contrast, spreads with different expiration months are referred to as horizontal (or time) spreads. A position that uses a combination of different strike prices and expiration months is often called a diagonal spread. Regardless of the strategy used, a spread may result in an initial credit or debit, depending on which options (strikes and expiration dates) are bought and sold.

In bullish markets,

vertical (or price) spread. In contrast, spreads with different expiration months are referred to as horizontal (or time) spreads. A position that uses a combination of different strike prices and expiration months is often called a diagonal spread. Regardless of the strategy used, a spread may result in an initial credit or debit, depending on which options (strikes and expiration dates) are bought and sold.

In bullish markets, the most popular spreads are Bull Call debit spread or a Bull Put credit spread In bearish markets, the trader would then deploy a Bear Put debit spread or Bear Call credit spread

So becoming a successful options trader is no mean easy task. However, by using the correct strategy and proper money-management techniques, anyone can be successful. There will certainly be obstacles along the road but and hard work and discipline are two of them .The way to overcome these barriers is to approach each trade with well-defined objectives , trading plan and system.