Fundamental analysis involves the thorough study of the companies the options of which you intend to utilize in your trading. The performance of the companies needs to be analyzed in terms of the revenues they generate, the profits they produce, the assets they hold, and how much debt they have incurred over time.

There is a direct correlation between the performance of the shares of a company in a market and the performance of the corresponding options. Fundamental analysis is also one of the keys in deciding which options trading strategies, if any, need to be considered by a trader.