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How can I employ options in an exchange-traded fund?



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Hello Kelvin,

Many exchange-traded funds use options in their trading. There are varied ways in which you can utilize options so that you can profit. ETF options are good instruments for investing, and they help to diversify your trading portfolio.
Selling a call option is one way you can make use of a choice in ETF. 
While selling a call option, you desire that the price if the ETF will fall. Selling an option is a better trading tactic that purchasing one. 
When you sell an option, the selling price is the maximum profit you will get. The risk you will also get when selling an option is unlimited. This is different when you buy an option since the payoff you get is infinite, and the maximum risk you will get is from the buying price.
Another way you can make use of the ETF option is by buying a call option. Before a call expires, you can purchase the underlying ETF at a specific price.
The price of a call option differs depending on the prevailing market price of the ETF. Therefore, you decide whether you want to shield or reveal yourself to the upside by buying the call.
You can also purchase a put option when you want to either expose or protect the downside of an ETF. Buying a put option is a safe thing if you aim to protect the risk that may come with an ETF declining in value. Typically, a put option allows you to sell an ETF at a given price.
Selling a put option is another way you can utilize an ETF option. Selling a put option allows the purchaser to sell an ETF at a specific price before the ETF expires.

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