Options are financial investment instruments which allow the trading of a security at a future date for a set price. Unlike forwards and futures however, options do not have to be exercised. The purchaser simply retains the right to purchase or sell the underlying security at a particular price on or before a certain date.

For instance, the purchase of a call option gives the buyer of the option the right to purchase a security for a certain price on or before a particular date. Similarly, purchasing a put option gives the buyer the right to sell the security. As described in the terms of the contract, the choice of whether or not to exercise the option is up to the buyer of the option.

The call option becomes more valuable as the stock underlying it gains value, while the put option becomes more valuable as the value of the underlying stock declines. If you like to purchase both call and puts that means that your call options will increase with the stock, and the puts will increase with a devaluing of the stock. The combined position that you are holding can increase in value regardless of the direction of the underlying value of the stock.

Options strategies can favor a variety of actions by the underlying stock whether bullish, bearish, or static. For those strategies that focus on static movement, they are further classifiable into strategies either bullish or bearish on volatility.

Straddle is a volatile option strategy or what we call Market Neutral Strategy. Being market neutral means that a long Straddle profits no matter if an underlying asset goes up or down. Yes, a Long Straddle allows you to simply put on the position and then totally take your mind off the stock as you will be in profit no matter if an underlying asset goes up or down.

A volatile option trading is known as Strangle which comes into use when the stocks are going up and down very strongly. You may like to call it a cousin of the long Straddle and the Long Gut and together they make up a family of basic volatile options strategies.

The Get Spread is on option trading strategy intended to take advantage of volatility by profiting from strong swings of stock prices in either direction. The Long Straddle and its cousin, the Long Gut Spread, are similar except that money options are used instead of stocks.

Most important, before you begin option trading you have clear idea of option tutorial, stock option education. Once you've decided upon your objective, you can begin to examine options strategies to find one or more that can help you reach that goal.