Concepts

Beginner’s guide to options trading
May 10, 2018
Concepts

Beginner’s guide to options trading

Richard Ho

If you’ve been trading stocks, you should have a pretty good understanding of the mechanics of buying and selling. Getting started with options trading is fairly simple. Here are a few things to know to get started.   Step 1: Setting up an options account with your broker The options account can be in a margin or...

2656
0
1
1 year ago
Tips for Trading Your First Option
May 02, 2018
Concepts

Tips for Trading Your First Option

Tony Zhang

Learning how to trade options takes time and patience. Luckily, there are plenty of courses and tools to help investors through this process. Selling covered calls for income is a great way to dip your toes into the options market, before moving onto buying calls and puts. We will examine these 2 primary strategies that are...

1680
0
1
1 year ago
The Da Vinci Code: The hidden messages within the option chains
April 20, 2018
Concepts

The Da Vinci Code: The hidden messages within the option chains

Richard Ho

Traders are very opinionated and have their own view on everything. This is why we have a market of buyers and sellers. Otherwise, everyone would be on the same side of the trade. This behaviour is built over time from experience and knowledge. You can do it too. For example, you are able to tell if the stock is trending up or...

977
0
1
2 years ago
Option Myths and Misconceptions
March 21, 2018
Concepts

Option Myths and Misconceptions

Jason Ayres

For those readers who are just beginning their options education journey, I am sure you have been presented with many opinions from other investors and investment professionals alike, regarding the value and risk that options bring to a portfolio. Unfortunately, many myths and misconceptions have arisen due to a lack of...

2078
1
Like
2 years ago
A Quick Guide to Volatility and Options Skew
October 23, 2017
Volatility

A Quick Guide to Volatility and Options Skew

Alan Grigoletto

In my last article, entitled Understanding Vega, we examined how Vega measures the changes in option pricing relative to changes in implied volatility. In today’s article I will delve a little deeper into volatility and its impact across the options chain. There are actually two types of volatility that option traders need to...

3852
0
3
2 years ago
Understanding Options Vega
October 19, 2017
Concepts

Understanding Options Vega

Alan Grigoletto

Prior to understanding Vega, we need to quickly review option-pricing models. The options pricing models are mathematical formulas that help investors and traders remove the guesswork from determining an options price. The models make some assumptions, primarily that stock prices are random and that only one of the option...

1601
0
Like
2 years ago
Generating Consistent Income with Covered Calls
July 14, 2017
Concepts

Generating Consistent Income with Covered Calls

Tony Zhang

Generating consistent income with covered calls can be achieved when using a disciplined and methodical approach. It’s important to understand your personal preferences before searching for income opportunities on your portfolio. Choosing expirations that suits your trading frequency and strike prices that fit your risk...

2465
2
3
2 years ago
Demystifying the Black-Scholes formula
June 27, 2017
Concepts

Demystifying the Black-Scholes formula

Martin Noël

The Black-Scholes formula is an option valuation model developed by two academics, Fischer Black and Myron Scholes, who first described it in a 1973 article. The article appeared in the same year that the Chicago Board Options Exchange (CBOE) was founded, and the model effectively democratized the use of options. Previously,...

8807
0
1
2 years ago
Early Exercise of Options
May 30, 2017
Concepts

Early Exercise of Options

Martin Noël

Holding shares in a company gives the shareholder the following rights:*The right to transfer ownership, *The right to dividends, *Voting rights, and *The right to residual income and assets. What this means is that shareholders are free to sell their shares, take dividends when they are paid, vote at shareholder meetings and...

4799
2
Like
2 years ago
Call Put Parity: How to Transform Your Positions
May 17, 2017
Concepts

Call Put Parity: How to Transform Your Positions

Martin Noël

I have been told frequently – and surely so have you – that selling cash-secured puts is a very risky strategy. Haven’t you? The main reason put forward for not using this strategy is that you could be forced to buy the security, even if the company had just gone bankrupt. In this light, the strategy rightly raises fears....

1904
0
1
2 years ago