Getting Started With Options Using Protected Positions by J. Demkovich and E. Theriot
If you’re bullish or bearish, you don’t need to expose
yourself to the full risk of the underlying stock. Instead, take a protected position using option spreads.
Last month we described how to get past all the complexity facing a novice options user. This
month, we’ll show you two other option uses that are applicable when you have a definite outlook on the direction of a stock. The first is to buy a call and the second is a more conservative method referred
to as a spread.