It used to be that option expiration occurred once a month, generally on the third Friday of the month. That all changed in 2005 when exchanges began listing options expiring each Friday. Nowadays, investors can buy and sell puts and calls on the monthly (“serial” or “third Friday”) contracts, plus six weekly expirations (“weeklys”). Weeklys […]

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Before learning to run, you had to first crawl, then walk. Before penning that masterpiece, the writer needed to learn the ABCs. And before jumping into options trading strategies, you need to learn the basics. For many traders and investors, options can be useful in a variety of circumstances and market scenarios. Although some option […]

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Editor’s note: A recent article introduced basic call and put strategies—selling covered calls for potential income and buying puts for downside protection. This follow-up article looks at buying straddles and strangles combinations for the option trader who’s expecting a stock to move significantly in one direction or the other, but not certain which way.    […]

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It’s late December, and you’ve taken the last two weeks of the year off. The kids are visiting friends, your spouse is out doing some shopping, and you’re home all alone on a weekday. As an active retail trader, you decide to turn on your computer and take a look at the markets. With no […]

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Stock traders and investors often enter orders to buy shares at a price that’s lower than the prevailing price. But did you know that certain options strategies can be used to pursue the same objective? By selling put options, some options traders use strike prices as potential stock entry points. Remember, if you sell a put and the […]

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Watch the financial news long enough, and you’re bound to hear someone channeling Johnny Most at a Celtics game: “XYZ is up 5 points!” “ABCD is down 3%!” Surprise slam dunks—and stock price changes—often mean big stories. And market news could be pretty boring without the drama. But if you don’t put volatility (“vol”) in […]

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In 2018, the exchange-traded equity options market will celebrate its 45th anniversary in the U.S. Though 2017 marked another year of historically low volatility, with an average daily volume of 16.7 million contracts, the year still ranked among the top three ever, according to data from the Options Clearing Corp. Why has options volume been […]

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Key Takeaways Review your portfolio and financial goals. Determine your outlook for the market or a particular security. Assess whether there’s a place for options in your investment strategy. Are you thinking about adding options to your investing arsenal? If so, it’s important to educate yourself about what they are and how they work before […]

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Options trading, like all investing really, is about decision making: weighing the potential reward against the potential risk, and the probabilities thereof. But isn’t that life in general? By some estimates, the average human makes 35,000 decisions in a typical day. Whether you believe that statistic or not, let’s just agree that we make a […]

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You probably know you should have a trade plan in place before entering an options trade. But what does that really mean? Here are a few ideas for creating your own trade plan, along with some of the order types you can use to implement it. Basically, a trade plan is designed to predetermine your […]

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