Month: January 2021

Options Trading with Options Contracts

Options trading is a form of derivative investing. Derivative means a term that is a combination of things like equity and contract. In the investment world, options refer to any derivative that grants the owner the right, but not necessarily the obligation, to purchase or sell an underlying item or instrument at some future date and time, depending on the type of the derivative.

Options trading can be done either with options contracts which are traded as shares on exchanges; or through futures and options exchange traded on exchanges like the New York Stock Exchange and the London Commodities Exchange. There are various ways in which an investor can make money through options trading, with some investors choosing to exercise it on equity securities (i.e. mutual funds), while others choose to deal on credit risk as well as interest risk by investing in mortgage backed securities (Maidenhead Trust, HYG, Fannie …

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