“Listen, I’m a politician, which means I’m a cheat and a liar, and when I’m not kissing babies I’m stealing their lollipops. But it also means I keep my options open.”
—Jeffrey Pelt (played by Richard Jordan) in The Hunt for Red October (1990)
We picked this quote not to claim using options means you have to be a liar or a cheat but to get to the root of the word. Choice, Options give you the ability to choose how you want to manage your portfolio.
In the preceding chapter you learned that Options are a contract to take a buy/sell action at a predetermined price by a predetermined time on a defined asset. In this chapter you’ll learn about Option positions, how to read an Option chain, and why the strike price really matters. ...