Day Trading Options

Trading options can be a low-pressure, low-risk way to generate investment income. What makes options unique is that the investor does not need to make any sort of immediate decision about buying or selling the stock to which the option is attached. As with other types of trades, options trading can be done on a day trading basis, which means the options are exercised on the same day they're purchased.

In day trading call options give the investor the right to buy or sell blocks of 100 shares of an underlying stock. Day trading call options doesn't necessitate exercising the option by close of business day, however, as options have four month life cycles and need only be exercised before their given expiration date.

In day trading call options are essentially a contract giving the investor the right to buy or sell the attached stock, but not necessarily the obligation to do so. However, to be true day trading, the investor should exercise the option in the same day.

This is especially useful when investing in options that expire soon. Such options often come with lower premiums (the price to buy the option) because their expiration date is approaching, and therefore long-term gain is minimized. But with the right day trading strategy, short-term gain can be significant.

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