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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Many investors and traders venturing into the world of options begin with single-leg options strategies. These basic strategies—buying and selling calls and puts—can help new options traders understand the mechanics of options trading, as well as the objectives of such strategies: Risk managementLeverageThe potential to generate income Basic strategies can also help new options traders […]

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Key Takeaways Learn the rights and obligations of buying and selling call and put options Understand the risk and return profiles of long and short call and put option positions Options give traders, well, options. But options aren’t just for traders; they can give qualified investors options, too. Investors use them to manage risk and […]

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Key Takeaways An option’s delta and gamma reflect its sensitivity to changes in the price of the underlying An option’s theta measures how its price changes with the passage of time An option’s vega reflects its sensitivity to changes in implied volatility Seasons change, four times a year to be exact. As each year progresses, […]

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