Part 1 Support and Resistance

Understanding the Foundation of Option Profits

Before diving into strategies, two basic forces determine profit in options:

A. Price Movement of the Underlying

If the underlying asset (stock, index, commodity) moves in the direction you expect, your option gains value.

Calls gain when price goes up

Puts gain when price goes down

B. Premium (Option Price)

Premium is the amount you pay (for buyers) or receive (for sellers/writers).
Profit/loss happens based on how this premium changes.