Options Trading
Learn the ins and outs of options trading from the ground up with Wanderer.
Covered Call Option Strategy
Covered Calls What are covered calls? A covered call is an options trading strategy that involves holding a long position in a stock and selling call options on that stock (buy stock, sell calls). This … read more Covered Call Option Strategy
Reducing Options Trade Exposure
Reducing a Winning Trade One of the greatest problems to have while trading options is finding yourself in the position of not wanting to give too much of your profit back. In this post we’re … read more Reducing Options Trade Exposure
Rolling Options Forward
Rolling Options The act of closing an open option position while simultaneously opening a new, mostly similar, option position via a spread. Reasons for Rolling Options There are two main reasons you might want to … read more Rolling Options Forward
Covered Calls
Definition of Covered Calls This is an options trading technique in which you own underlying stock, then sell (write) call options at a higher strike price at an equivalent amount to your stock position. Because … read more Covered Calls
The Bid/Ask Spread
Going to the Market Definition The bid/ask spread is the difference in price between the price a buyer is willing to pay (the bid), and the price a seller is welling to sell (the ask). … read more The Bid/Ask Spread
Options Basics—Managing Profits on Options
Managing Options Profits A common problem new options traders have—and a great problem to have—is how best to take profits. Option’s leverage can mean that a relatively small stock price move can mean significant percentage gains … read more Options Basics—Managing Profits on Options
Options Stop Orders
Creating Stop Orders for Options Trades At Wanderer we preach the need for using stops on trades. Without knowing your risk you can’t accurately calculate your reward-to-risk, and without that it’s impossible to determine if … read more Options Stop Orders
Options Basics—Selling Naked Puts
Selling naked puts (being short puts all by themselves) is a risky trade reserved for experienced traders. While it can leave you open to significant downside risk, it can also be used as an effective … read more Options Basics—Selling Naked Puts
Options Basics—Strangles
A strangle option strategy involves buying (or selling) an out-of-the-money call, and buying (or selling) an out-of-the-money put with the same expiration. A strangle buyer expects the price of the stock to move significantly outside … read more Options Basics—Strangles
Options Basics—Iron Condor
An iron condor is a trading strategy that uses both a put spread and a call spread. It is similar to a strangle except that it limits profit/loss potential to the difference between the strike … read more Options Basics—Iron Condor