Options Trading – How to Trade Options Via Naked Spreads

Options Action

Options Trading – How to Trade Options Via Naked Spreads

Prominent options brokers take part in a series of round table discussions aimed at explaining exactly how to make money via options trading. On television, there are no TV airings of Options Action ahead of 14 days from now. In that time it is expected that more people will make use of the internet to learn how to trade options on stock and futures exchanges. For many investors, the internet is the best place to learn. For others, they prefer face-to-face meetings with well-known investment advisors or members of the relevant investment clubs.

So where should you be in order to find out how to make money via options for action? As was noted in the opening paragraph of this article, this is a top of the line information series. You can find the web sites for all the major investment banks, brokerage houses and half-hour firms in this regard. However, you will also find web sites for other brokerage firms, as well as investment banks that are less well known, along with investment centers that specialize in exotic options trading.

Of course, even these options activity forums cannot offer you everything you need to know about making money via options action. One thing you will definitely want to do is take a look at what some of the more prominent investment banks, brokerage houses and half-hour firms have to say on the subject of options actions. While the majority of them seem to agree that using spreads is a good way to increase profits via options trading, not all of them will talk about how to take advantage of naked spreads. In fact, some of them will tell you to avoid it, while declining to discuss how to work with naked spreads.

What you really need to learn about how to make money via options action features option traders talking about using short call and long put spreads to increase profits. And some of them will tell you to never use naked spreads, while declining to discuss how to increase your profits by using spread betting. However, some of these same investment banks and half-hour firms will advise their customers to use naked spreads on all of their derivative positions. Why would they do that?

Simple: because that is exactly what they do! These investment banks, brokerage houses and half-hour firms are big players on the stock market and they know that when you are able to make money via options action, you can go on and sell options on other stocks. However, if you are selling naked spreads, you cannot do that – at least not easily. That means they have to advise their customers to only use naked spreads when they are trading options on stocks that they own themselves… and when they do happen to sell those stocks, they know that they can then get a nice profit.

If you need to know how to trade options via naked spreads, talk to an investment bank or a brokerage house, and you may be advised to use some kind of option contract between you and the buyer, rather than going it alone. It does help to have someone who knows about options trading show you the ropes, but don’t let that person tell you what to do with options. If you understand the options for action, you will be fine!

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