Trading — Option

: You own the stock and sell a call against it. This generates immediate income (the premium) but caps your potential profit if the stock price soars.

: One contract typically controls 100 shares, allowing for significant market exposure with less upfront capital than buying shares outright. Basic Strategies OPTION TRADING

: You sell a put and set aside enough cash to buy the stock if the price falls to the strike price, effectively getting paid to wait for a better entry point. Risk vs. Reward : You own the stock and sell a call against it

: Risk is strictly limited to the premium paid. However, options are time-sensitive; if the stock doesn't move as expected before expiration, the entire investment can be lost. Basic Strategies : You sell a put and

: You buy a put if you expect the price to fall. This is often used for speculation or as "insurance" for stocks you already own (a Protective Put ).