Key Takeaways LEAPS options contracts have long terms, offering expiration dates as far out as three years  The risk components of LEAPS—as measured by options greeks—have different characteristics from standard options There’s no arguing that options are time-sensitive instruments. Options contracts decay, which is one of the reasons many new traders shy away from them. […]

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Key Takeaways Selling covered calls could help generate income from stocks you already own Selecting strikes and expiration dates depends on the desired risk and reward trade-off of the position Take a step-by-step look at how to trade a covered call So you own a bunch of stocks in your portfolio. Some have made a […]

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Key Takeaways Volatility levels shouldn’t be the only consideration when deciding which options strategy to trade High volatility levels can mean higher options prices, but know the risks Volatility can change drastically from one day to the next Any veteran option trader will tell you that part of the allure of options strategies is their […]

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Key Takeaways Learn the basics of options exercise and assignment Understand the difference between in-the-money and out-of-the-money options The surest way to avoid exercise or assignment is to liquidate or roll a position ahead of expiration  So your trading account has gotten options approval and you recently made that first trade—say, a long call in […]

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Key Takeaways Selling covered calls is a neutral to bullish strategy that involves selling calls, collecting premium, and rolling the options out  Covered calls can be used to generate income and offset a portion of the loss should the stock’s price drop The choice of strike price plays a major role in the covered call strategy […]

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Key Takeaways A swing trade may last days or weeks Some swing-trading strategies offer more than one price target Learn how to structure a combination trade to pursue multiple price targets when swing-trading stocks The objective of a swing trade is typically to capture returns within several days. Swing traders usually know their entry and […]

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Key Takeaways Tracking the risk/reward profile can help you weigh the odds When deciding whether to stick with a trade, ask if you’d initiate the trade as of that point Capital allocation has a mental component as well as a financial one  If you’re like many traders, when you buy a stock, you set your […]

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