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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.

 Article Archive

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.





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