Introduction When trading options, it is crucial to understand the disparity between in the money vs. out of the money. In simple terms, this is a way to calculate an option’s intrinsic value, relative to the underlying asset’s current price. Having the knowledge of...
Investing's "squeeze" occurs when the stock price of a company moves rapidly. Whenever this happens, investors may exhibit "squeezed" and seem to change their stock positions in ways they hadn't intended. These changes usually cause stock prices to rise. Gamma...
Buying an awesome company doesn't have to be based on the market's price. Instead, you could specify your price and receive payment when the stock dips to the level. In this article, let's focus on Selling Put Options. You can do that by trading put options. Put...
Definition of Put Options A put option is jargon, which is commonly used in the trading shares at stock markets. Anyone who holds a put option has the right to trade the shares of equity, at a given price. These options also carry an expiration date, so anyone who...
Put Credit Spread, or a bull put, is an strategy of options. The investors use the strategy when he is expecting a reasonable rise in the price of any asset. There are 2 put options for forming a range. It consists of a low strike price and also a high strike price....
Day trading options has become very popular these days. However, it wasn't as popular as today and wasn't part of the past's conventional intraday strategies. Conversely, today's investors are more involved in day trading. So, what is the reason for such growing...
When there are most open options contracts, there is a strike price for Max pain. We also call it max pain price or Max Pain Theory. The options contracts involve puts and calls. It is the price at which a stock can cause financial losses at expiration to a large...
The type of those striking choices contract that can exercise on the basis of predetermined dates is the Bermuda option. The dates that predetermine can often be one day for every month. It is a rotation on the options in American-style. It permits the receptacles to...
The iron butterfly options strategy, sometimes also known as the iron fly options strategy, is one of the best and most popular options trading strategies. This strategy has gained so much attention because it offers finite loss potential. That said, the peace of mind...
IV Crush options is a very important phenomenon in options trading. Options traders need to understand it better to avoid huge losses. Are you among options traders who suffered significant losses because of IV Crush options? Then this guide is what you need to...
Options selling premium is the amount an options seller receives upfront against the risk taken by the seller. Yes, you read it right. There is the selling side of options contracts as well that allows you to make gains. However, most traders aren't aware of this side...
The put to call ratio (PCR) is a very important measure for options traders. It helps traders determine the overall mood of a market. So, if you are interested in learning all about the put to call ratio, then you are on the right platform. Because we are going...
Options Greek Cheat Sheet is the best guide for options traders. How so? Because it serves as a quick reference guide for options traders to sum everything up. Do you want to know about Stock Options Greeks and Options Greek Cheat Sheets? Then you are on the right...
“What is a high short ratio" is a question that arises in the minds of all options trades, especially beginners. Why so? Because all of them know that options traders must consider the short interest ratio while trading. However, no one knows what a high short ratio...
A long strangle is an options trading strategy that ensures higher profit potential and is comparatively cheaper than other option strategies. If you want to learn how this strategy works, what are its benefits, and the risks associated with it, then you are on the...
The strip option strategy is a popular option strategy among options traders. Traders use this strategy when they are bearish on the stock and anticipate higher volatility in the next few days or weeks. This strategy is actually a variation of a long straddle options...
A bull call ratio backspread strategy is among the most popular option trading strategies that offer unlimited profit potential. It is a bullish, risk-defined, and multi-leg strategy. As it is a bullish strategy, traders with a bullish outlook on the underlying...
Long-term Equity Anticipation Options or LEAP options are options contracts with long-term expiration dates. Their expiration duration is one or more than a year. Long expiration duration is the only difference between LEAPs and other types of options contracts. That...
Writing covered calls means selling someone else the right to buy an underlying security you already own. The contract includes a specific price and a timeframe as well. In addition, you need to own at least 100 shares of the underlying security to write a covered...
An optiosn spread is among the most popular options trading strategies. It involves buying and selling multiple options contracts of the same type and having the same underlying security. Whereas, the same type means you either buy and sell multiple put options or...
Theta is one of the most useful options Greeks measures. It measures the rate at which the value of an option falls as the expiry date approaches. In other words, this option Greek measure evaluates the value or price of options with the passage of time. If you...
Cost of Carry (CoC) refers to the cost traders have to bear for holding a position in the market. It is a crucial aspect of trading in almost all types of markets. As you know, holding an investment position in any market comes with a cost. For instance, market costs...
Expiry in derivatives refers to the day on which a derivative contract expires. All derivatives contracts are based on any underlying security run for a particular time period. They all expire at the end of that period and new ones are issued after that. Furthermore,...
Call option payoff means the profit or loss a trader makes from buying or selling an option. If you want to know all about this key aspect of options trading, then you are on the right platform. In this article, we are going to explain the call option payoff in the...
Neutral spread options trading strategies enable traders to make profits even when the price of the underlying security neither rises nor falls. Traders use these strategies when they don't expect prices to move significantly in either direction. Therefore, it is...
Vega is a major Option Greek measure that tells traders about the sensitivity of the option's price to change in volatility. Options trading is challenging because it entails the accurate prediction of what will happen to the value of options in the future. AND...
A short straddle is an options trading strategy that works perfectly when the expected volatility in the market is limited. You can use this strategy when you expect little movement in the price of the underlying security. However, this is a risky strategy and should...
Delta refers to the rate at which the value of an option changes with the price fluctuations of the underlying security and delta hedging is an options trading strategy to reduce the risk associated with delta. The strategy revolves around arriving at a price-neutral...
Time decay or Theta in options trading is a key aspect of options trading that all options traders need to know about. It refers to the natural reduction in the value of an option contract when the expiration date approaches. Time decay affects both short-term and...
A calendar spread is among the highly rewarding options trading strategies. Where most options trading strategies involve buying or selling options contracts with the same expiration date, this strategy involves selling and buying options with a different expiration...
Ratio spread strategies are among the highly useful but underrated options trading strategies. These strategies involve entering long and short options positions. Ratio spreads are highly rewarding strategies, but when executed with accuracy. Therefore, it is...
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