A covered call is an options insurance strategy where you simultaneously have an open position on a stock and sell a call option for the same symbol. Adding a short call in your open positions means that you are obligated to sell your stocks at the strike price contingent on the option buyer. However, you Read More…
A covered put is an options insurance strategy where you simultaneously have a short open position on a stock and sell a put option for the same underlying option. Adding a short put in your open positions means that you are obligated to buy your stocks at the strike price, contingent on the option buyer’s Read More…
A floor is an options insurance strategy where you simultaneously have a long open position on a stock and a long put for the same underlying asset. Adding a long put to your open position means that you are obligated to sell your stock at the strike price. The long put ensure that you can Read More…
A cap is an options protection strategy where you simultaneously have a short position on a stock and a long call for the same underlying asset. Adding a long call to your open position means that you are obligated to buy your stock at the strike price. However, you already have a short position on Read More…
A bull spread is a strategy where you simultaneously buy a long call at Strike Price 1, and sell a call for Strike Price 2. Recall that users will pocket the premium should the option not be exercised. By selling a call with a higher strike price, users can reduce their total transaction costs and Read More…
A bear spread is a strategy where you simultaneously sell a put at Strike Price 1, and buy a put at Strike Price 2. Recall that users will pocket the premium should the option not be exercised. By selling a put with a lower strike price, users can reduce their total transaction costs and create Read More…
Future Options are exactly what their name implies – an option on a futures contract. Futures and Options – Related Derivatives Futures and options are both derivatives – meaning a security whose value solely depends on the value of the underlying asset. A future derives its value from the commodities or currencies which it represents Read More…
There is an infinite number of strategies that can be used with the aid of options that cannot be done with simply owning or shorting the stock. These strategies allow you select any number of pros and cons depending on your strategy. For example, if you think the price of the stock is not likely Read More…
A straddle is an investment strategy that involves the purchase or sale of an option allowing the investor to profit regardless of the direction of movement of the underlying asset, usually a stock. There are two straddle strategies, a long straddle and a short straddle. How to create a Long Straddle position A long straddle Read More…
You can find the underlying stock price, along with the option strike price, expiration date, and whether it was a “Put” or “Call” right from the option symbol! AAPL1504L85 is the way we write our options and can differ from other websites or brokerages. Our options are written: Symbol Year Day (Call or Put and Read More…
Options are an important instrument for many traders, and to understand options you need to understand options tables and learn how to read option tables! Depending on the software or website you use, the actual information may vary, but all tables have these basic sets of information: Calls Puts Strike Vol Expiry Last Chg Bid Read More…
What are options? An option gives the owner the right, but not the obligation, to buy or sell the underlying instrument(we assume stocks here) at a specified price(strike price) on or before a specified date(exercise date) in the future. (this is different for European options as they can only be exercised at the end date). Read More…
A Call Option gives the holder the right, but not the need to purchase a fixed quantity of a particular stock at a specific price inside a particular time. Call Options are bought by investors who anticipate a price increase.