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Articles about option spreads (0-50 of 320)

  • Smart Investors Use Online Trading To Profit In The Recession
    By: Tom Hawkins | - The current financial crisis is set to be on a par with some of the biggest crashes of the 20th century, and all outlooks for the future look pretty gloomy. But there are still great opportunities out there for financial-minded people to make good money using the wide range of online trading websites that are taking the stockbroking industry by storm.

    Historically, recessions have always been a period when the least efficient parts of the economic system are pruned. Only the stron ...
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  • Long And Short Option Strangle
    By: meliss | - Stock trading is nevertheless one of the most profitable markets today. This is no doubt because investors, even beginners, can make money out of it. But of course, knowledge of how the market works is the key to succeed in this market. Profitable traders employ powerful strategies like option strangle. Almost always, the simplest strategy is the most effective. One of the most effective strategy is the option strangle. There are two types of strangle strategies the long strangle or also kno ...
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  • Trading Butterfly Option
    By: meliss | - In stock trading, traders avoid spreads of any kind because limiting losses can also limit gains. It is a must to trade in a realistic way. If you trade a three-fold gain, which is the strategy that requires only little up-front capital, you strictly limit losses by neutralizing declining time value while opening the possibility of five to ten fold gains. This is done by holding the position to expiration, wherein it is part of any options players. The Butterfly option involves all these qualiti ...
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  • What To Look For In Options Trading Sites
    By: Jamie Hanson | - Everyone has their own option strategies in option trading, but when you're just getting started, it can be very confusing. You'll see different alternatives spreads around the web, blogs mentioning they have the best options strategy and options trading sites galore, offering to teach you trading systems. So, how do you choose one that will help you reach options trading success?

    Initially, take a look around the website. Though you will be limited to the public view, the site shou ...
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  • Credit Vs Debit Spread-which Is Better?
    By: ameen kamadia | - Are you wondering which is better: option trades that result in a credit or trades that result in a debit? Simply put, you're asking whether you should choose a credit spread or debit spread strategy. Let's consider both options in more detail.

    A credit spread (also called a net credit spread) involves the investor selling one option then buying another option. The second option is in the same class and also shares the same expiry date. However, there are different strike pr ...
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  • Dog Harness Or Collar "€" Which Is Better?
    By: Nicole Fiumara | - The answer depends on your situation. Here are a few issues to consider:
    Dogs with respiratory problems should wear a harness. Dog collars may put too much pressure on a dogs throat and airway.
    Small dogs like Chihuahuas, Yorkies and Pomeranians usually fare better in a harness. Smaller dogs have smaller, more delicate necks.
    Dogs that pull also may need a harness. Again, its a question of protecting your dogs health. Pulling on a collar may cause a ...
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  • Options Trading Strategies For Dummies
    By: Matt kaldor | - There are many options trading strategies that can be used to make profits in the stock market, but it is not possible without understanding basic options trading concepts. The idea behind trading options is similar to trading stock, with a few inherent differences that need to be comprehended before jumping into a trade with real money.

    Here are some options trading concepts that must be digested:

    1. Unlike stocks, which are sold by individual shares, options are s ...
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  • Trading Options: Good Or Evil?
    By: Kerry Given | - You have probably heard people refer to options as a risky enterprise, akin to gambling. And it is true that options trading can be very risky, especially when engaged in with minimal knowledge and preparation. The average stockbroker or financial planner does not have sufficient options knowledge to guide you in the use of options in your portfolio. But that doesn't mean options cannot play a role in a conservative portfolio of stocks.

    The majority of today's options trading volume ...
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  • Have You Insured Your Stocks?
    By: Kerry Given | - Many people think of options trading as very risky and suitable only for the "high rollers". In this article we will demonstrate one of the ways options can be used in conservative financial portfolios.

    The basic definition of a put option is that it gives the owner the right, but not the obligation, to sell 100 shares of the underlying stock at the strike price anytime before expiration. If I buy 100 shares of Apple Computer (AAPL) at $136.50 or $13,650 and buy one contract of the ...
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  • Put Time On Your Side
    By: Kerry Given | - Many conservative income generation trading strategies depend on the time decay inherent in options pricing. When I establish an iron condor well OTM (out of the money), I am selling option spreads and expecting those spreads to slowly lose value as the underlying stock or index trades within a channel. Other traders may use butterfly spreads or place OTM credit spreads on one side only (calls or puts); all of these trades are based on time decay working in the trader's favor. This is in contras ...
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  • Vertical Spreads And Implied Volatility
    By: Kerry Given | - One will commonly hear or read the following "rule of thumb" for options spread trading:

    When implied volatility is high, sell credit spreads and when implied volatility is low, buy debit spreads.

    Unfortunately, this is simply not true. The credit spread and its corresponding debit spread at the same strike prices will always have virtually identical returns on investment (ROI).

    Vertical spreads either require a net investment to initiate (a debit spr ...
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  • Stock Option Education Covered Calls - Stock Options Software - Call Options 090
    By: optionstradingdomain | - Not bad, butif the stock went to $29.50 then you would have missed out onanother $1.00 profit. If you were to short the stock you need to be able to cover you position. If you choose to roll the positionthen you must be somewhat bullish on the stock. An investor feels there is some limited downside for a stock but is not as confident as an outright call writer and as a result buys the higher strike price call to cap upside risk. If theoption is going to expire in-the-money and you want to keep t ...
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  • Stock Options Education - Commodity Option Trading - Stock Option Trading 350
    By: optionstradingdomain | - But, the market's direction sometimes plays a role in the risk associated to trading certain option spreads. There will certainly be obstacles along the road but and hard work and discipline are two of them .The way to overcome these barriers is to approach each trade with well-defined objectives , trading plan and system. Trading is a business and as such must be treated like one. Kosmider is the President and cofounder of TimingResearch.com which provides advice and recommendations to stock ...
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  • Futures Trading - Option Trading Online - Call Options 482
    By: optionstradingdomain | - A very simple example of an options trade would be this: If you're selling a commodity worth $100,000 (say 1,000 shares of a stock worth $100 per share), and a prospective buyer likes the price, they can offer to pay for an option to buy all of those commodities, while spending the time researching other investments. Though the potential for profit is largest with the horse that has the greatest odd, the chance of that horse winning is slim. Options trading is an investment vehicle for experien ...
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  • How Stock Options Work - Stock Option Education Covered Calls - How Do Stock Options Work 043
    By: optionstradingdomain | - The examples preceding were very simplified and were only meant to show the basic concepts of derivative trading. Institutional investors can make $1,000,000s trading options, yet most individual investor lose in the options market. If you anticipate the share price to drop in this one-month time period, you could purchase a put option that will give you the right to sell your shares at a preset price at any time within the next thirty days. Traders? success in the trading market depends, on the ...
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  • Option Trading Online - Option Spread - Swing Trading Strategy 345
    By: optionstradingdomain | - You may republish this article on the condition that it is not edited and all html links to our website are kept intact. Visit his website today for more info on free options trading and commodities options trading. You should consider being the one who consistently hits singles via being the one to sell those veritable lottery tickets. An options trader can create a spread position by buying and selling equal number of options of the same class the same underlying security but with different ...
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  • Option Strategy - Future Trading Strategy - Options Trading 053
    By: optionstradingdomain | - The OTCs are traded not in exchanges, but between two independent groups; hence these transfers are the bi-lateral contracts. More strategies include selling options, and using sets of options for calendar spreads, straddles, strangles and butterflies. Another option to trade a stock is the over-the-counter (OTC) trading, which is the opposite of exchange trading occurring in option exchanges or futures exchanges. For a beginner, it's easy to get drawn into the complex net, believing that ther ...
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  • Stock Covered Call Options - Swing Trading - Option Trading Strategy 048
    By: optionstradingdomain | - It is not a suitable vehicle for investors looking to maintain assets without direct management, as it's very much a timing related purchase and float. The more time you have, the more likely you will make money. Sometimes, to throw salt on the wound, the stock moves your way a day or two after expiration. Options trading is not a casual investment strategy; it's a strategy used by people who are investing as their profession, or who intend to manage their own wealth directly. If the stock goe ...
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  • Options Trading Strategies - Option Trading Charts - Covered Call Options 345
    By: optionstradingdomain | - Get your Momentum Stock Trading System and sign up for my free weekly online trading system newsletter here at: Also, you need to have a good idea of how much time and effort you are willing to invest in your investment strategy. Using the complex strategies does not necessarily result in better gains than with basic puts and calls. Everyone you meet, and every website you visit has some different advice. Learning to invest your money in any market, and even more so the complex Option Trad ...
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  • Option Trading System - Trade Options - Stock Call Options 048
    By: optionstradingdomain | - Far too many traders think that they're only successful if every trade is a winner, which is ridiculous. More strategies include selling options, and using sets of options for calendar spreads, straddles, strangles and butterflies. If the option is set to expire on Friday, then the trader must be prepared to deal with that timeline. Plus, you don't want to be the last to know when a major event happens. In addition to the payment mode, find out about the services provided by them, commission rat ...
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  • Options Trade - Option Trading Software - Options Investing 482
    By: optionstradingdomain | - Stock and option traders that take the time to learn and apply a few simple strategies that are available through options put themselves in a better position to assess risks in the markets and potentially put themselves into positions to profit substantially. In options trading, the strategies make a lot of difference. Hedging refers to any device through which one can protect oneself against loss. There are many strategies to identify the most attractive spreads to sell. Many seek to focus on ...
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  • Option Trading System - Option Quotes - Option Trading Online 476
    By: optionstradingdomain | - Options are great in that they allow you to control a large amount of stock with a relatively small amount of money. An advantage of the traditional options is that they have lower premiums than single payment option trading. We will go on to discuss the many different types of options strategies that one could leverage for their specific scenario. There is a lot more to consider when trading options and a lot more terminology you need to know then when trading stocks. For example, lets say th ...
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  • Options Trading Information - Option Trading System - Stock Option Strategy 048
    By: optionstradingdomain | - The option will expire at the close of trading on the third Friday of that month. I generally write about ways that people can maximize their consumer dollars. Forex options are a great way to make profits, but must be used with caution. When learning how to trade options effectively, traders may wish to also understand how they can effectively combine their new knowledge with technical analysis. If you are still holding the options at that time they will expire and be worthless. There are a v ...
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  • How To Trade Option - Option Trading Online - Options Investing 482
    By: optionstradingdomain | - When we deduct our initial cost of $0.50, we are left with a profit of $1.00. Another good thing about currency option trading is that it is so versatile. It is better to take a general look at the different types of investment opportunities available, and select the ones that interest you the most. Experience is very important here, and experience is only gained by the actual doing. If the new leadership of that country causes it to become more progressive, then the value of that currency wou ...
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  • Option Trading - Option Trading Online - Options Trade 911
    By: optionstradingdomain | - Moreover, the means for realizing the potential for financial success in option trading may be difficult to create or identify. Simply enter the scenario and let it play it out, if you are right then cash is deposited into your account, what can be better than that! If you are not right, then the loss is simply your premium. For example, on March 7 we bought GBZCS (BBH Mar 2006 195 Call) at a price of $1.50. With stocks, time is proportional to growth, as stocks of well-known companies tend to ...
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  • Naked Option Writing "€" The Cadillac Of All Option Trading Strategies
    By: Danny Swad | - Lets be clear on this. There is no other option trading strategy that can outshine or even equal the profit generating potential of the sport of writing naked options. The term sport is used here because those who practice this money making trading technique not only turn out fabulous profits but also have fun in the process. It is a fun, profitable but dangerous option trading sport that is mostly played by seasoned and skilled option players. That is, until the sports perils wer ...
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  • Risk Of "€˜unlimited Loses"€™ In Naked Option Selling Is A Myth!
    By: Danny Swad | - For option sellers it is disconcerting to hear people say that selling naked options is extremely risky because it carries the threat of unlimited loses. Nothing is farther from the truth! Its a myth! Its about time we correct this misconception and put this fear to rest.

    While theoretically the selling of naked options carries with it the potential for unlimited loses, in the real world this so-called risk is controllable to such a large degree as to be meaningless. T ...
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  • Stock Options Trading - Option Trading Quotes - Option Quotes 622
    By: optionstradingdomain | - Plus, you don't want to be the last to know when a major event happens. This system is nice if you like to see profits, because you don't run the risk of a stock that's risen suddenly dropping again and wiping out your profit - you took your profit early. "Mar" stands for March, so this option will expire on the third Friday of March 2006, which is next week. The information present is enough even for an inexperienced person to invest in the stock market. While a stock trader is look ...
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  • Stock Options Trader - Options Trade - How To Trade Option 051
    By: optionstradingdomain | - Also, compare the fee charged by various investment sites before choosing one. Online stock traders owe it to themselves to explore the potential for options trading. Option trading is more complicated than stock trading because traders must choose from many variables besides the direction they believe the market will move. The more you chop and change, the higher your chances of losing more. For a broker, Forex option trading occurs over the counter (OTC), thus, the traders can choose the pri ...
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  • Options Trading Strategies - Options Trading Tools - Stock Option Strategy 051
    By: optionstradingdomain | - The stock will be around a long time but an option has an expiration date. Enquire about the financial status of the company before investing in it. For instance, if a person inclined to invest in the domestic market opens a site of the foreign market, it can be confusing. There is a lot more to consider when trading options and a lot more terminology you need to know then when trading stocks. However, certain things should be kept in mind while trading online. Another approach is to take your ...
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  • Be A Money Spinner With Call Option Trading
    By: Wincent Loh | - You could be a money spinner with call option trading. Several traders in the market try to make a difference by adopting complex call option techniques. However, at times when you look around for complex solutions, the solution may actually be one that is absolutely simple.

    Similarly sometimes it is the simple or the basic call option trading that is just right for the prevailing market trends. The below mentioned guidelines would be of great help to make a good profit with call ...
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  • Three Winning Bear Market Option Trading Strategies Revealed
    By: Jonathon Hartman | - Most people lose money in a bear market. Are you cognizant of the bursting tech bubble and consequent recession circa 2001-2002? In this article, we will be covering three option trading strategies for a recession or a bear market, which will allow you to maximize profits rather than lose money.

    Option Strategy No. 1 - Buying Put Options
    Buying put options is fairly easy. This option trading strategy can even be used in an IRA account as long as you have been authorized by ...
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  • Option Pricing With Better Trades
    By: Svetlana Nunez | - Option pricing is a mystery to most traders. They struggle to comprehend terms like implied and historical volatility or intrinsic and time value, or the "Greeks" (Delta, vega, theta, gamma, rho). These terms are intimidating and my experience suggests that at least half the folks you hear talking about them do not really understand very much about them. It is important to at least be intellectually honest about it and know what you don't know. It is also a good idea to debunk your vocabu ...
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  • Option Pricing And Better Trades
    By: Svetlana Nunez | - Option pricing is a mystery to most traders. They struggle to comprehend terms like implied and historical volatility or intrinsic and time value, or the "Greeks" (Delta, vega, theta, gamma, rho). These terms are intimidating and my experience suggests that at least half the folks you hear talking about them do not really understand very much about them. It is important to at least be intellectually honest about it and know what you don't know. It is also a good idea to debunk your vocabu ...
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  • Success Keys For Stock Option Trading
    By: J Trader | - Learning how to trade stock options is one of the most lucrative skills that you can gain for outsized gains in today's market. Stock option trading is the only investment I know of where a beginning trader armed with some solid trading knowledge and skill can turn a few hundred dollars into several thousand in just a few short months. Whether you are wanting to use options to trade high-flying momentum stocks, applying credit spreads to channeling stocks, or writing covered calls on blue-chi ...
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  • Simple Stock Option Trading Techniques For Successful Trading
    By: Billy Williams.. | - I have been an avid student of the markets for almost 17 years now and every year I see aspiring traders come into the market to seek fame and fortune but end up broke and embittered. Why is this is so? This new century presents more tools for success (real-time data feed, instant news reports, expert opinion by the greatest financial minds in the world, neural networks, trading systems, etc.) yet traders tend to struggle more now than when I started out. Successful stock option trading doesn ...
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  • What Is An Iron Condor?
    By: William Tan | - The Iron Condor option trading strategy is purely a market neutral strategy. An Iron Condor is constructed using a bull put credit spread together with a bear call credit spread on the same underlying asset to create a market neutral position. Iron Condor Spread can be entered a one order (simultaneously selling both bull and bear spread at the same time) or it can be entered as 2 separate orders (a bull put spread and a bear call spread separately). We prefer the latter because we can collect m ...
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  • Selling Houses Rent To Own, Is One Of The Easiest Way To Make Money In Real Estate
    By: Charles W. Moore | - Rent to Own is a creative selling strategy that allows you to rent and sell an item or property quickly and receive three income streams. Rent to Own has many names: "Lease Option", "Lease Purchase", and "Lease with Option to Buy", to name a few.

    The use of the Rent To Own strategy has been around for a long time. Have you ever heard of RAC (Rent A Center)? It's a business that allows customers with bad or no credit, to rent New Brand Name electronics or furniture with the opt ...
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  • How To Get An Edge In Stock Option Trading
    By: Sam Perdue | - A good understanding of volatility is important to option trading. A misunderstanding of this topic could leave a trader with losses and frustration as to why their trades that and go as planned. In this article, I am going to discuss the two primary types of volatility that an options trader may want to consider before placing their trade.

    There are two types of volatility that should be considered before placing an option trade. The first type is called implied volatility and ...
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  • Paper Trading Credit Spread And Iron Condor Option Trades
    By: Brad Griffin | - Paper trading using one of the many virtual trading systems provided by option brokers, and now CBOE, is so important if you have never traded options. This is especially important trading credit spreads, like Bull Puts and Bear Calls and ultimately Iron Condors. These are special strategy trades that must that must be fully understood before trading with your own funds. You must practice entering, closing and adjusting Bull Put and Bear Call spread trades. You must fully understand an Iron Con ...
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  • How To Use Options To Replace Stocks Or Futures For Massive Profits And Less Risk.
    By: Wai Hoong Chin | - Since options started being trading in exchanges, few people actually use options in their trading or investment. However, recently the market has changed. In 2005, 1.5 billion contracts are being traded in the USA. In CBOE alone, more than $200 billion worth of option contracts are being traded.

    More and more individual traders and institutional money managers are interested in options mainly because of their leveraged profit opportunities, ability to limit risk, ability to profi ...
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  • Index Credit Spread Trading
    By: Brad Griffin | - I am an active trader of option credit spreads on the SPX, NDX and RUT broad based stock indexes.

    I write OTM Bull Put Spreads first. During months when the market is moving sideways or slightly up, I add OTM Bear Call Spreads to create Iron Condors.

    I like trading the Indexes because they are not subject to the same wild price swings as individual stock. It is also easier to make risk management adjustments on Index trades than say GOOG which can change in value ...
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  • Option Credit Spread Trading - Limited Risk With Limited Profit
    By: Brad Griffin | - I started trading options in the late 90's. After selling my first option and collecting an immediate credit I and became an option seller for life. I became a student of option selling strategies and started selling covered calls on stocks I brought and owned. I was doing OK collecting premiums month after month until a few of my stocks tanked and my losses over a 2 month period wiped out 6 months of profits. My mistake was picking not so good stocks for this covered call option selling strateg ...
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  • Option Trading Developing An Option Trading System
    By: Jason Ng | - There are 2 kinds of option trading systems in general; Discretionary and Mechanical. A discretionary option trader follows no specific rules but chooses, enters and exits an option trade using all of his knowledge or gut feeling. A mechanical option trader is one who translates his knowledge of choosing stocks, entry and exit into objective rules. Such a system is commonly translated into a computer program in order to completely automate the option trading system. The advantage of mechanical o ...
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  • The Advantages Of Trading Options Over Stocks
    By: Billy Williams | - Copyright 2006 Billy Williams

    In the investing world, trillions of dollars worth of shares are bought and sold each day on the major exchanges all over the world. On any given day, traders and investors can take part in the purest form of capitalism by putting their money at risk by buying into any of the major global corporations across the planet in the pursuit of profit. Yet, there is another way of speculating, trading options, which can be far superior to just trading the s ...
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  • Stock Option Trading To Increase Returns
    By: Neal Williams | - There has been a steady rise in the use of stock options by investors to maximize their leverage and returns over the past twelve months. Chicago Board Options Exchange confirms this observation when they recently reported that the month of March was their busiest on record with volume up 55% over the same month last year. In fact all previous stock option trading records were broken when over 5.6 million stock option contracts were traded in a single day.

    Stock option trading ena ...
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  • Credit Option Spreads
    By: Daniel Beatty | - What is a credit spread?

    Investopedia says "An options strategy where a high premium option is sold and a low premium option is bought on the same underlying security."

    OK I know that is very vague, so lets see if I can do better.

    It is a trading strategy in which you buy an out of the money option at a certain strike price and then you sell an out of the money option at a different strike price of the same month. As time goes on the options will d ...
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