How to trade options contracts and use the bull call spread

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.

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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