Part 2 Support and Resistance

Why Trade Options? (Advantages)

Leverage: Small capital controls big positions.

Hedging: Protect stock portfolio from losses.

Flexibility: Profit in bullish, bearish, or sideways markets.

Income: Selling options generates consistent premiums.

Risk Control: Losses can be predefined by structuring trades.

8. Risks of Options Trading

Time Decay (Theta): Options lose value as expiration approaches.

Liquidity Risk: Not all options are actively traded.

Complexity: Strategies can be difficult for beginners.

Unlimited Risk (for sellers): Selling naked calls can wipe out capital.

Over-leverage: Small margin requirements may encourage oversized positions.