Options trading involves the buying and selling of options contracts on public markets, providing the holder the right, but not the obligation, to buy or sell an asset at a specified price before the option expires. This form of trading is particularly useful for hedging risk or speculating on the future price movements of assets. When used strategically, options can be less risky compared to direct stock purchases and offer significant leverage. This allows traders to gain substantial exposure to an asset with a relatively small capital investment.
For a deeper understanding of options and to explore strategies for their use, check the resources available at uTrade Algos.