Options Trading
The first—and perhaps biggest—challenge of options trading is understanding what an option is.
An option is a contract giving you the right, but not the obligation, to buy or sell a specific security at a specific price over a specific period of time. After that period of time has elapsed (known as “expiration day”), the option ceases to exist.
A call option gives you the right to buy the security.
A put option gives you the right to sell the security.
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Options Trading Post Archives
LEAP call options are an excellent entry point for new option investors. Here are 3 reasons buying LEAPS can beat buying stocks.
Let me tell you about the greatest options trade I saw in my 10 years on the Chicago Board of Options Exchange - and what I learned from it.
When market volatility rises it can be tempting to sell out of stocks entirely, finding a way to hedge your portfolio may be a better choice.
Buying or selling LEAPs puts can benefit investors who want longer-term contracts with less volatility than shorter-dated options.
If you’re worried about the outcome of the presidential election (or the market in general for the next seven months) here’s how to hedge your portfolio with options.
The options market is vastly different now than it once was, thanks to computers. You can’t compete with algorithms, so what do you do?
Much like home and auto insurance, buying put options is a way to protect your portfolio from sudden disaster. Here’s how it works.
Using my unusual option activity scanner to identify how sophisticated hedge funds are trading is a powerful tool for identifying trends.
Options trading can often be dismissed as too risky or too confusing. But it’s time to expose some of the five biggest options trading myths.
Writing covered call options is a great way to boost your yield on stocks you already own, and involves a lot less risk than most investors think.
Correctly managing winning options trades can be the difference between a double-digit single and a triple-digit home run; here’s how I do it.
Gamblers may be familiar with the Martingale strategy of doubling down on losing bets. But that can be a dangerous investing approach.
The options strategy we’re discussing today is an ideal way to generate additional income by targeting positions you’re bullish on without taking on added risk.
Identifying unusual options activity can be a key to unlocking big gains in stocks that the big hedge funds are about to pour into.
Want to know how the big institutional investors use options? Here is an example of how one trader spent $132 million on three tech stocks.