In options trading, there are some basic lessons that are the backbone of many other successful options trading strategies.
How to engage in spread trading in options trading to enhance potential gains is one of these lessons.
Spread trading is a foundational tool that you should have in your options trading toolkit.
It will allow you freedom and flexibility for enhanced profit and will give you defense against potential loss while reducing your overall risk.
Now, let us look at this fundamental of options trading, the spread trade.
We have demonstrated how well options function in unison with a stock position.
They enhance potential gains, provide profit protection and limit the risk of the entire investment.
They enable us to manage risk in a single stock as well as an entire portfolio.
But, as good as options are in conjunction with stocks, they can be even better when traded against each other.
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