Best Options Trading Strategies In Canada 2024 Reviews

options trading

Options trading is a broad range of investing tactics that include a buyer and a seller enacting an options contract to specify a range of buying or selling “options” available to the buyer within a timeframe they’ve outlined.  

Options trading is becoming more and more popular as the price of living rises and economic and geopolitical temperatures become more volatile. Within an options contract (which is crucial to the options trading process), a trader can specify “options” for themselves as far as asset pricing within a specified range of time. This allows for predictability of pricing, and the option to either enact a trade (or not) within the range of time indicated. Options trading truly provides endless opportunities for investors to protect themselves against future price changes. 

What is an Expiration Date?

The expiration date is the day that your opportunity to buy a stock at its strike price will close. You can actually purchase an option with the same expiration date as the current day for a quick options contract. 

Best Options Trading Strategies

It might seem obvious, but there are many different kinds of strategies that traders can employ to use options to get profit. Here are a few of the most popular market moves when it comes to playing the options market. 

Long Call

A long call option entails the most basic type of options trading; enacting an options contract to enable the trader to have the “option,” but not “obligation” to buy a certain stock at a certain price within a set date range. Long calls are one of the most popular types of options trading.

Long Put

A long put entails the prediction that a stock’s price will fall, so the investor hedges against that loss with an option to purchase the stocks at a certain price within a certain timeframe. 

Short Put

A short put is the opposite of a long put. In this scenario, an investor will predict that a stock’s price will hold, and thus make money on their option if the price holds or rises. 

Covered Call

The covered call strategy entails owning the stock that your options contract is for. Covered calls are “covered” since the writer of the option already owns the same underlying stock they are making the covered call for. A covered call is a popular form of options trading. 

Married Put

With the married put strategy, investors buy a put option to protect themselves against the potential price lowering of the same underlying stock they already own. It’s different from a covered call because a covered call entails selling an option on the stock in question. 

Bull Call Spread

A bull call spread entails buying a call option and selling a higher strike call option. It’s an optimistic take on options that involves expecting a rise in stock price or a bull market. 

Bear Put Spread

A bear put spread has the presence of a long put and a short put. The long put has a higher strike price and the short put a lower price. The goal with bear spreads is to profit with the hope that the underlying stock price will fall.

The Relation Between Stock Price & Options Trading Strategies

options trading (1)

Most trading strategies are centered around the movement of stock prices. Stocks directly affect the benefits of options to traders. If you have an option that allows you to sell a stock even as the stock price falls, you protect yourself against that period of time when the stock falls. If you have an option that allows you to buy a stock for a lower strike price even with a rising stock price, you protect yourself against the scenario where the stock rises. These are the basic concepts and relations between a stock price and options strategies. 

What is a Strike Price?

Strike prices are the prices at which you agree to purchase or sell a stock within your agreed-upon timeframe in your options contract. The strike price is key to the success of your options trade, and strike prices need to be as strategic as they can be (meaning you’ll want to research how often the stock falls and rises to see if the stock remains a good candidate for your options trade). 

The Role of a Strike Price

The strike price is an essential part of the options trading process. Strike prices are part of the options contracts and whether your contract has a high strike price or lower strike price, you must keep your trades within these limits to enact the trades that your options contract allows. 

What is Underlying Stock?

The underlying stock is the stock directly related to the options trade. It’s the stock you write your contract to reflect. If the stock falls and you have an option with a higher price to sell it at, you’ll miss out on gains. If the stock rises and you have the option to sell it at a lower price, you’ll once again miss out. You want to avoid these scenarios with the underlying stock. When you utilize a box spread, a covered call, or a married put, you buy an option with the same underlying asset you already own, lowering your potential risk of loss with this underlying asset. 

What does “In the Money” mean?

This phrase is used to describe a scenario where the option you possess along with the purchased stock remains open for gains. A long call would be in the money if the call buyer noticed that there was a lower strike price than the market price. A short put would be in the money if the strike price minus the market price was a positive number (aka a higher strike price). 

The Top 2 Options Trading Platforms In Canada

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Robinhood’s easy-to-use system coupled with their no-fee options trading is their best offering to both newbie investors and more experienced traders. This allows for options trades to be made without fear of hefty fees, and with a simple interface guiding them along the way.

Robinhood provides a fresh new take on investing for beginners. Their program is built for beginners, but it grows with the investor as they research and gains investing experience. In general, one of Robinhood’s best features is its free sign-on stock, but we also love the fact that they don’t charge fees for options contracts. In order to trade options with Robinhood’s program, you have to be approved for their “Level 2” trading profile. This might require trading on their platform for a time, or having prior experience.


TradeStation is an excellent choice for experienced traders looking for advanced trading tools and features. The platform’s customization options and competitive pricing make it a standout in the industry, and its educational resources and tools are valuable assets for traders looking to improve their skills and knowledge.

TradeStation is a powerful trading platform that offers a wide range of tools and features designed to meet the needs of experienced traders. One of the platform’s standout features is its advanced trading tools, which allow traders to create and test their own options trading strategies.

TradeStation’s customizable charts and indicators make it easy for traders to track market trends and make informed trading decisions. The platform also offers advanced order types, such as conditional orders and order triggers, which can help traders execute options trades more efficiently.

TradeStation offers a range of educational resources and tools to help traders improve their skills and knowledge. These resources include webinars, articles, and video tutorials on a range of trading topics. Additionally, TradeStation’s community forum provides a space for traders to connect and share insights and strategies with each other.

Final Thoughts

If you want to buy or sell an option, you’ll need to start with education and strategy. Options trading involves buying or selling the opportunity to purchase or sell rising or falling stock to attempt to get stock gains on your initial investment. Investment advice varies when it comes to which strategies to employ as a new or seasoned investor, but the goal is the same: to get the maximum profit you can on whichever options you’ve selected.

Frequently Asked Questions (FAQs)

Which Options Strategies Can Make Money in a Sideways Market?

A sideways market entails little overall movement in the market (not trending upwards or downwards). There is limited downside to this market, but investors can take advantage of this climate by using a put and a call on the same stock, and if the options expire worthless the investor can keep the premium payment. This strategy is called a short strangle.

What Is a Box Spread?

A box spread is a balancing act of buying a bull call spread as well as a bear put spread. Think of it like “boxing” your limited risk.

What options strategy has the highest amounts of risk?

Selling a call option without underlying stock can be a riskier move for investors. If you do sell a call option, it can be helpful to own the stock indicated in the call option when selling calls.

What is a long call?

A long call means that a buyer has the option to purchase a stock at the strike price indicated in the future, as specified by the contract. A long call is one of the most popular forms of options trading. Any “long” stock position indicates that the buyer or seller of the stock expects the price to increase, therefore a long call indicates a buy that would have maximum upside if the cost of the stock increased.

How do I generate income if my option expires worthless?

If a stock’s price expires worthless, it means that the strike price ended up being lower than the stock’s price at the expiration date on the options contract. 

What are the tax implications of options?

Options trading is treated just as another investment where an investor buys an asset to make profit. Since options trading involves buying an investment and getting the maximum gain, these gains are taxed as capital gains. If the investor buys stocks that don’t end in gains, there is a net loss and this is also reported.

What are at the money options?

At the money options have the same strike price as their underlying stock. This is a safer option for some of your first options trades if you want to learn the ropes. They have more fixed risks than other investments.



Brenna Major
Brenna Major, BA
Business Content Writer & Editor
Brenna is a finance editor who enjoys writing about entrepreneurial opportunities and personal finance tips. She graduated from Liberty University with a bachelor's degree in business and now helps small businesses market their products as a digital marketing consultant.


Kristina Knight-1
Kristina Knight, Journalist , BA
Content Writer & Editor
Kristina Knight is a freelance writer with more than 15 years of experience writing on varied topics. Kristina’s focus for the past 10 years has been the small business, online marketing, and banking sectors, however, she keeps things interesting by writing about her experiences as an adoptive mom, parenting, and education issues. Kristina’s work has appeared with, NBC News,, DisasterNewsNetwork, and many more publications.

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