Short of having a crystal ball, picking winners when stock option trading is not as hard as many people would have you believe. In the first place, when considering purchasing or selling stock options, you need to conduct extensive research on the underlying stock yourself, or rely on someone else to do it for you [...]
“To everything (turn, turn, turn)There is a season (turn, turn, turn)And a time for every purpose, under heavenA time to be born, a time to dieA time to plant, a time to reapA time to kill, a time to healA time to laugh, a time to weep” – The Byrds
Just like the seasons [...]
Most people will tell you that day trading stock options is extremely risky and shouldn’t be attempted by new traders. And they are right, to an extent. Trading options can be risky even for professional traders with 20 years experience.
However, trading stock options can be a great way to leverage your investment. For a [...]
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 [...]
Option is a legal agreement between buyer and seller to buy or sell security at an agreed price in a certain period of time. It is quite similar to insurance that you pay an amount of money in order that your property is protected by the insurance company. The difference between these two is option [...]
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 [...]