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→
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→
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→
If you missed the first post explaining WON—Wanderer Options Navigator, please give that a read first. After a few months worth of trades, it is a good time to review our results. During this period … read more WON Trading Update→
Gaining Options Momentum Options trading can be overwhelming for beginners. They tend to move quickly and have a lot of moving parts. I started out my career as an options trader, so it has become … read more WON—Wanderer Options Navigator→
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→
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→
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→
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→
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→