Using Option Greeks: Delta

Delta is a measure of the rate of change in an option’s price for a $1 move in the underlying stock or index. In this article we help you understand the basics of delta and why traders pay attention to delta.

Fighting Time Value with Vertical Spreads

Long option buyers face some particular disadvantages when it comes to time value. But there is a solution to managing time value by turning an option trade into a vertical spread.

Projecting Call and Put Options Prices

Call and put options don’t move independent of each other. In many ways, they are two sides of the same coin.

Option Trading Strategy – Short Straddles

Sometimes traders evaluating a straddle feel like the barriers are so far away, that there is just no way that this trade could become profitable in the timeframe they have given it. It’s a fair objection and if you feel this way, or can’t find stocks or indexes that are likely to move outside the … Continued

Option Trading Strategy – Long Straddles

Options investors have a unique ability to profit in the market no matter which direction it moves. A straddle is one of strategy for making money outside a bull market. These trades are market neutral, have an extremely low probability of maximum loss and pay big returns when the market moves a lot. [VIDEO] Option … Continued

Exercise Assignment and Expiration for Option Traders

Options buyers and sellers need to understand the terms expiration, exercise and assignment before trading options. This video will help.

Options – Understanding Delta

Trading and investing in options is all about probabilities. Determining the current probability of an option expiring in or out of the money is vital when trying to estimate the likelihood of your maximum loss or potential gains. You can also know what option traders think about the future potential of an option’s price. Knowing … Continued

How to Position Size an Option Trade

Learn how much money you should invest per option trade. This article answers the question for short and long options as well as covered calls.