First off, there are: Five Levels of Option Trading. When you have option trading privileges in your brokerage account, there are 5 option trading levels which measure how risky you can be with your option trading strategies.
Options, Calls and Puts are traded over a regulated trading exchange such as the CBOE (Chicago Board Options Exchange).
A “Market Maker” is the term used to identify a professional floor trader or trading firm that facilitates and takes the other side of your trade, if there is no preexisting buyer or seller in the marketplace.
Options can be considered complex and confusing, but they are rather simple once you learn the basic fundamentals and the primary risks involved.
The main risks of trading options include:
The beautiful thing about options is that, unlike stock, it is NOT a “zero sum” game. What I mean by that is I can make a bullish option trade on a particular stock, while you could take the other side of the trade, and we both can still profit in the end. This is because options are multifaceted and versatile by offering many different ways to profit.