So we can start gauging, then, ‘Hey, what’s an appropriate investment vehicle or a trade vehicle for me?’ ‘Is it too volatile?’ ‘Is it not volatile enough?’ So understanding that and being able to quantify that allows us to start selecting securities that fit our own personality for trading, and that’s a big key-in. So understanding that helps us figure out what we want to trade and that fits our own individual risk tolerance.
Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Covered calls provide downside protection only to the extent of the premium received and limit upside potential to the strike price plus premium received. With long options, investors may lose 100% of funds invested. Multiple-leg options strategies will involve multiple commissions. Please read the Options Disclosure Document titled Characteristics and Risks of Standardized Options.
Past performance is no guarantee of future results.
All expressions of opinion are subject to change without notice in reaction to shifting market conditions.
This discussion is provided for illustrative purposes only, and should not be considered an individualized recommendation or personalized investment advice. The strategies mentioned may not be suitable for everyone. Each investor needs to review a security transaction for his or her own particular situation.
Schwab does not recommend the use of technical analysis as a sole means of investment research.
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