Options trading
seems daunting to many investors. But, the truth is, the key to
trading these securities is knowledge. Throughout this series we
will attempt to provide you with insight on how options work, how
they are useful, and why you might consider them as part of your own
portfolio.
Managing
Bull Put Spreads With A Simple Adjustment Plan Learn
a technique to halt losses when the market moves quickly in an
unfavorable direction.
What
To Do When Your Trade Goes Awry Check out some
repair strategies to help boost the profit potential of a losing
position.
The
Price-Volatility Relationship: Avoiding Negative Surprises
Discover how this inverse dynamic has a dual effect
on option positions.
Risk
Graphs: Visualizing Your Profit Potential With a
single diagram, you can see how price, time and volatility affect
potential gains.
Put-Call
Parity and Arbitrage Opportunity Look at trades that
are profitable when the value of corresponding puts and calls
diverge.
To
Limit or Go Naked, That Is the Question Compare
naked strategies to credit spreads and see if the unlimited risk of
going naked is worth it.
Using
the Greeks to Understand Options These risk-exposure
measurements help traders detect how sensitive a specific trade is
to price, volatility and time decay.
How
Does Your Margin Grow? Risk-management tool SPAN
margin boosts profitability prospects by helping to determine when
to exit a trade.
Alternatives
to Closing Below Intrinsic Value Understanding how
options work and the markets they trade in will help you get a
better price for your option.
Options
Trading Volume And Open Interest Learn how these two
statistics can give you an edge in trading options.
What Are
Warrants? Discover the advantages of this
high-return investment tool that's largely unexploited by investors.
Using
LEAPs As A Surrogate for Owning the Underlying Check
out some of the advantages of using these types of contracts instead
of stock as the underlying for your covered calls.
Dividends,
Interest Rates and Their Effect on Stock
Options Learn how analyzing these variables are
crucial to knowing when to exercise early.
Do
Option Sellers Have a Trading Edge? Take a look at a
study that discovered that three out of every four options expired
worthless.
Getting
a VIX on Market Direction Learn about this very
useful volatility index of the CBOE, which can tell investors about
the mood of the stock market.
Stock
Option Expiration Cycles Knowing them is crucual to
successful trading since your strategy may require adjustments
during the life of a trade.
Trading
A Stock Vs Trading Stock Options - Part
Two Interested in learning more about these
derivatives? We go over some of the factors affecting their price.
Trading
A Stock Vs Stock Options - Part One Interested in
learning more about these derivatives? We go over some basic
terminology and the source of profits.
Out-of-the-Money
Put Time Spreads Learn about this low-risk, bearish
options strategy used to speculate on major market
declines.
Capturing
Profits with Position-Delta Neutral Trading Learn
how to gain from a decline in implied volatility with any movement
of the underlying.
Going
Beyond Simple Delta: Understanding Position
Delta Learn about this hedge ratio, which tells us
how many contracts are needed to hedge a position in the
underlying.
Getting
to know the "Greeks" Understanding price influences
on options positions requires learning delta, theta, vega and
gamma.
Ratio
Writing: a High-Volatility Options Strategy Selling
a greater number of options than you buy profits from a decline back
to average levels of implied volatility.
The
Advantages of SPAN Margin Find out how it provides
futures and commodity option strategists with more bang for their
margin buck!
An
Option Strategy for Trading Market Bottoms The
reverse calendar spreads offers a low-risk trading setup that has
profit potential in both directions.
Profiting
from Time-Value Decay with S&P 500 Options on
Futures Writing bull put credit spreads are not only
limited in risk, but can profit from a wider range of market
directions.
Becoming
Fluent in Options on Futures There's one simple
hurdle in the transition from stock to futures options: learning
about product specifications.
Forecasting
Market Direction with Put/Call Ratios Options are
not only trading instruments but also predictive tools that can help
us gauge the feelings of traders.
Vertical
Bull and Bear Credit Spreads This trading strategy
is an excellent limited-risk strategy that can be used with equity
as well as commodity and futures options.
The
ABCs of Option Volatility The mystery of options
pricing can often be explained by a look at implied volatility (IV).
Introduction
to Put Writing Learn about a strategy that may be
appropriate if you have a positive outlook on a stock.
The
Importance of Time Value Move beyond simply buying
calls and puts, and learn how to turn time-value decay into
potential profits.
Naked
Call Writing Learn about this aggressive trading
strategy that can be used to generate income as part of a
diversified portfolio.
Trading
Puts - Going Short Instead of selling borrowed
shares, learn an alternate way of making money on a falling
stock.
Going
Long on Calls Learn how to buy calls and then sell
or exercise them to earn a profit.
Married
Puts: A Protective Relationship Learn the basics of
this strategy, and if it makes sense for you to use.
Come
One, Come All - Covered Calls A good place to start
with options is writing these contracts against the shares you
already own. |