Key Questions You Should Answer When Trading Options

The following questions should be treated seriously and answered as factually as possible before you engage in a option trading strategy.

• Do I feel comfortable trading in an upward direction or a downward direction?

• Which underlying stocks would successfully suite my strategy?

• Have I done the fundamental analysis on the company the shares of which I will be involved with?

• Have I done technical analysis on the underlying stock (analysis of graphs, etc)?

• Are there any major news regarding the company due to come out soon? Are quarterly reports to come out soon?

• What are my entry, exit, stop loss points?

• Am I aware of the potential risks and rewards of the trade I will be initiating?