Before you start trading options, it is essential to understand the basics. An option is a contract that gives the holder the right, but not the responsibility, to buy or sell an asset at an appraisal on a certain date.

1. Long Call

The long call is one of the most straightforward options strategies, and it involves buying a call option with the expectation that the underlying stock will rise in price. This strategy can be used when bullish on a stock and profit from a potential price increase.

2. Long Put

The long put is another simple options strategy that involves buying a put option with the expectation that the underlying stock will fall in price. This strategy can be used when you are bearish on a stock and profit from a potential price decrease.

3. Bull Call Spread

The bull call spread is a strategy used when you are bullish on a stock but want to limit your risk. This strategy involves procuring a call option and simultaneously selling a higher strike call option.

4. Bear Put Spread

The bear put spread is a strategy used when you are bearish on the stock but want to limit your risk. This strategy involves buying a put option and selling a lower strike put option simultaneously.

5. Straddle

The straddle is a strategy used when you are unsure which way the stock will go. This strategy involves accumulating a call option and a put option simultaneously with the same strike price and expiration date. This strategy is generally used when you expect big news or a major announcement from the company.

6. Bull Trap

A bull trap is a false signal that indicates that the stock will rise when it falls. It can often be caused by a breakout that turns out to be false.

7. Bear Trap

A bear trap is a false signal that indicates that the stock will fall when it rises. It can often be caused by a breakout that turns out to be false.

8. Double Bottom

A double bottom is a chart pattern formed when the stock falls to a new low but rebounds and creates a higher second low than the first low.

9. Double Top

A double top is a chart pattern formed when the stock rises to a new high but then rebounds and creates a lower second high than the first high.

10. Head and Shoulders

The head and shoulders chart pattern is one of the most reliable chart patterns, and traders often use it to identify a trend reversal. This pattern is formed when the stock price falls to a new low but then rebounds and creates three successive highs, with the middle-high being the highest.

11. Flag

A flag is a chart pattern traders often use to identify a trend reversal. This pattern is formed when the stock price falls to a new low but then rebounds and creates two successive highs, with the second high being lower than the first high.

12. Wedge

A wedge is a chart pattern traders often use to identify a trend reversal. This pattern is formed when the stock price falls to a new low but then rebounds and creates two successive highs, with the second high being more comprehensive than the first high.

13. Momentum

Momentum is one of the most critical indicators for options trading. This indicator evaluates the rate of change in the stock price, and they can use it to identify bullish and bearish trends.

14. Moving Averages

Moving averages are one of the most popular technical indicators traders use. These indicators are used to smooth out the price data, and they can use them to identify bullish and bearish trends.

Remember always to use stop losses and limit orders to protect your investment. And most importantly, stay patient and don’t panic in challenging market conditions.

For more information, take a look at how to trade options.