Experienced Wall Street players are always looking for new strategies to protect their assets.
One of those strategies is called options trading. An options contract is a financial tool that allows an investor to pay a fixed sum of money to lock in a set price to either buy or sell an asset at a future date.
"It's best to think of options as an insurance product for stocks," said Chris Murphy, co-head of derivative strategy at Susquehanna Financial Group.
But options can be a risky strategy for new investors without proper knowledge. Frequently, new investors do not engage the same strategies when trading options that seasoned investors do.
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Watch the video above to learn more about options contracts and what the pros do differently to increase their chances of profit.
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