The Best Options Trading Strategies

What are option trading strategies? Webster’s Dictionary defines the term strategy as:

1. a) the science of planning and directing larger scale military operations, specifically (as distinguished from TACTICS) of maneuvering forces into the most advantageous position prior to actual engagement with the enemy.
   b) a plan or action based on this.


2. a) skill in managing or planning, especially by using stratagems.
   b) a stratagem or artful means to some end.

When applying a definition to investing in the market, we want to pay particular attention to the words “maneuvering into the most advantageous position prior to actual engagement” and the words “skill in managing or planning especially by using stratagems.”

Picking a stock or group of stocks is only half the battle. Making the most from the chosen investment opportunity is the other half. This is where your option trading strategies come in.

The wrong option trading strategies even when applied to the right opportunity can produce increased risk, decreased profits and even potential loss. Therefore, understanding and applying the proper option trading strategies is critical.

The actual selection of an investment opportunity from those offered normally depends on the type and style of research the investor favors and deems necessary.

This selection process for your option trading strategies is a checklist of different types and pieces of data that are favored by the individual investor. These pieces of data can consist of charts, indicators, oscillators, fundamental analysis, news or even tips.

Each investor has his/her own investment selection protocol. As an investor, once you complete this process and choose your investment opportunity, your option trading strategies take over. Inherent in the selection of the stock is expectation.

Every investor has some expectation for any chosen opportunity. Therefore option trading strategies must be selected which best fits those expectations.

The proper option trading strategies will be the option trading strategies that allow for the highest possible return with the least amount of risk and the best possible protection that can be afforded.

Obviously, since every opportunity will have a somewhat different expectation along with different variables surrounding it, each opportunity should have a different “ideal” option trading strategies. By and large, when choosing a stock to invest in, most investors look to purchase a stock they think will go up. The directional play is as good a place as any to start our discussion of option trading strategies.