Options Basic

1 What are Options?

Options are contracts between a buyer and a seller that allows the buyer (the owner or holder of the option) the opportunity to buy or sell the underlying asset at a specific strike price before or on a specified date. Options have the potential to provide investors with greater trading opportunities compared to traditional equity buy/sell strategies.

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2 What are the advantages and risks of Options?

2.1 Options are cost-efficient because it possesses great leveraging power. An investor can obtain an option position similar to a stock position without purchasing the stocks themselves. However, it can come with a high risk of volatility.

2.2 Options trading is a popular way to hedge your positions. However, when not properly understood by investors, they may pose a high risk of loss.

2.3 Options have the potential to deliver higher percentage returns and losses.

2.4 Options provide a strategic alternative to investing in equity. There are many ways to use options to recreate synthetic positions. However, there are many risks associated with trading options, and we suggest doing a lot of research before trading options.

Disclaimer: Options trading involves significant risk and is not suitable for all investors as investors may be exposed to potentially rapid and substantial losses. Options trading functionality is subject to Webull Securities' review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.