Options Trading

Options Basics—Legging Into a Call Spread

Traders, hopefully, will often find themselves in the position of making money on their trades. A very natural inclination, unfortunately, is to book profits too early. This is particularly true of new traders or traders … read more Options Basics—Legging Into a Call Spread

Options Basics—Call Spreads

Call spreads involve both buying and selling a call. They can be used to reduce initial premium outlay, and reduce risk (but also limit profit potential). They can also help offset the effects of vega … read more Options Basics—Call Spreads

Options Basics—Call Buying Example EXPE

In this video we’ll walk through an example of buying EXPE call options.

Options Basics—Call Buying Example AAPL

Let’s do a walk-through of buying calls in AAPL, from looking at the chart and determining an entry, to deciding where our stop would be and what our upside target is. With those numbers in … read more Options Basics—Call Buying Example AAPL

Options Basics 3—Calculating Option Risk

How do we calculate the risk of an option.

Options Basics—Choosing a Strike Price

How to choose what expiration and strike price to trade can seem daunting when you first look at an option chain. However, 90% of trades will probably do well to just stick with one general … read more Options Basics—Choosing a Strike Price

Options Basics 2—Reading an Option Chain

There are a few basics to understand about reading an option chain.

Options Basics—Implied Volatility

Implied volatility is one of the key determining factors in an option’s value. Higher volatility equals higher price. During a normal, slowly grinding market, implied volatility is of less concern when trading options, because it … read more Options Basics—Implied Volatility

Options Basics—What is Delta

Delta is the ratio that compares the change in price of an option to a corresponding change in the stock. It’s easier to understand this way. Look at the image below of DAL stock. The … read more Options Basics—What is Delta

Options Basics 1—Calls and Puts

Options for Beginners Options are derivative contracts that allow buyers of the contracts to buy (using calls) or sell (using puts) a security at a chosen price (strike price) on or before a specific date … read more Options Basics 1—Calls and Puts