As we hear either from financial management book or seminar from financial gurus, it often mentions that we should not put all the eggs into one basket. The point is if the basket is leaking down and the hole is getting bigger and bigger, it end up the egg will fall down.
This is what happens if we put our money in US stock market and expect the market goes bullish in order to make profit, we might have to hold our breath for a moment because market might go sideways or even bearish for few months or a year. However, if we know how to make profit by using Option Trading Strategy, we can get advantage in bi-directional market meaning to say we can still make profit when market goes either bullish or bearish.
For some people may get confuse what Option Trading Strategy is, especially for those who have just heard this terminology at the first time; Basically option is contract that conveys buying and selling shares of underlying securities at specified prices on before any given date and Option Trading Strategy is the method we apply in US market with different varieties and every Option trader may be suitable with his/her own strategies that may not be suitable for others. Also, Option Trading strategy we use when market bullish can be different from when market bearish and it can be different also when market goes sideway.
However, all the Option Trading Strategies we talked about at above, come with the risk and I strongly recommend that before we jump into, we have to understand well how it works in order that we can avoid losing our capital and one thing to remember is that Don’t let our emotion, fear and greed, control us for making decision on diversifying our portfolio.