Dec 6, 2014 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Our stock options strategies, whether writing covered calls or selling cash-secured puts (the topic on my just published book) requires us to make an overall market assessment before entering any trades. In last week’s article we evaluated bull market scenarios....
Nov 29, 2014 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Covered call writing or put-selling? In-the-money or out-of-the-money strikes? When we view an options chain there are some basic principles we must factor into our final covered call writing or put-selling decisions. First, which of these two strategies is most...
Nov 15, 2014 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Interest rates and the option Greeks play an important role in understanding option trading basics. Rho, not considered a major Greek, measures the change in an option’s price resulting from a 1% change in interest rates. When interest rates do change, it is...
Nov 8, 2014 | Investment Basics, Option Trading Basics, Stock Option Strategies
Option trading basics teaches us that selling call and put options is actually selling time value. Time value consists mainly of time to expiration stats and the implied volatility (IV) of the underlying security. Since most of us are selling monthly options, the main...
Oct 25, 2014 | Investment Basics, Option Trading Basics, Options Trade Execution
Options trade executions include a discussion of the levels of trading approval needed to use various options strategies. You will recall that these defined levels will vary slightly from one brokerage to another. Here is a chart reviewing a sample of these trading...
Oct 18, 2014 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Stock Investing, Stock Option Strategies
With the stock market declining over 5% in the past month as a result of geo-political and global concerns exacerbated by the fears of an Ebola epidemic we find ourselves in a position that may lead to “panic” in our investment decisions. The stock market seemed to...
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