2.option- one of a number of things from which only one can be chosen; "what option did I have?"; "there no other alternative"; "my only choice is to refuse" alternative,choice deciding,decision making- the cognitive process of reaching a decision; "a good executive must be good at ...
For example, when a particular stock is trading at $75 a share, you might buy a call option giving you the right to buy 100 shares of that stock at a strike price of $80 a share. If the price goes higher than the strike price, you can exercise the option and buy the stock at ...
FX options trading basics For investors buying equity options, the future can be reasonably predictable; they may not know what the market is going to do, but they already have a worst-case scenario - the most they can lose is the option premium. the potential pitfalls of naked options laid...
Some additional points about theta to consider when trading:6 Theta can be high for out-of-the-money options if they carry a lot of implied volatility. Theta is typically highest for at-the-money options since less time is needed to earn a profit with a price move in the underlying. ...
ExclusiveNaked Call and Naked Put – Risky Option Trading Strategies Let’s look at a put option example. Assume HD has a market price of $195. If an investor owns a put option for HD with a strike price of $200, then it has an intrinsic value of $5. This is known to be “in-...
Too bad The Options Playbook didn’t exist back then, or the latter wouldn’t have been much of a concern. On opening day, the CBOE only allowed trading of call options on a scant 16 underlying stocks. However, a somewhat respectable 911 contracts changed hands, and by the end of the ...
As always, the best way to get a handle on spread trading is by placing a few hypothetical paper trades. We’ll work through some more of these spreads in the near future, working with credits as well as debits with puts as well as calls. Stay tuned. ©...
Some additional points about theta to consider when trading:6 Theta can be high for out-of-the-money options if they carry a lot of implied volatility. Theta is typically highest for at-the-money options since less time is needed to earn a profit with a price move in the underlying. ...
Suppose you own 100 shares of stock XYZ and it’s currently trading at $100 per share. You’ve watched it appreciate in value over the years, and you think it’s got a good chance to continue upward—but if it were to drift down over the next two months, you’re concerned it could...
That might be good or bad for the position, depending on if it is a long option, or a short option. Call options have deltas between 0 and 1, because as the underlying asset increases in price, call options increase in price—and vice versa. Alternatively, put options have deltas ...