Jan 27, 2018 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
After entering our covered call writing trades, we immediately go into position management mode. For most of us who started our stock investment careers buying and selling stock, this may include setting stop loss orders to mitigate losses when share price declines....
Jan 13, 2018 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Covered call writing and cash-secured put-selling are conservative strategies geared to retail investors who have capital preservative as a key strategy requirement. When we use high implied volatility underlying securities the strategy will have a broader range of...
Jan 6, 2018 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
When covered call writing is combined with protective puts the strategy is known as the collar strategy. The short call places a ceiling on gains and the long put represents a floor protecting losses. The two option positions should result in a net credit. Typically,...
Dec 30, 2017 | Investment Basics, Option Trading Basics, Stock Option Strategies, Technical Analysis
Trading volume is the number of trades for a security in a given time frame. On a chart volume is typically represented as a histogram (vertical bars) and represents a confirmation or lack thereof of the other technical indicators. For example, if a moving average...
Dec 23, 2017 | Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
In part I of this arbitrage series we defined arbitrage as the simultaneous purchase and sale of an asset to profit from a difference in the price. It is a trade that profits by exploiting the price differences of identical or similar financial instruments on...
Dec 16, 2017 | Investment Basics, Option Trading Basics, Options Trade Execution, Stock Option Strategies
Understanding stock and option pricing requires an awareness of arbitrage and market efficiency. Although most retail investors do not have the tools to take advantage of arbitrage opportunities, a comprehensive understanding of how it works adds to our...
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