An option is a contract that allows the buyer to buy or sell shares of stock at an agreed-upon price. Investors can get outsized returns by using options instead of simply owning stocks. Be forewarned ...

The stock market gives investors many opportunities to build wealth. While many people get started with trading stocks, some investors hear about options trading and may want to give it a try.

Picking the right options trading strategy for you will depend on what direction you think a stock’s price will go and your capacity to absorb losses. Buying an option, or “going long,” will have less ...