The short straddle can profit when a stock stays stuck in a flat, range-bound zone, but the limited reward and unlimited risk make it one for experienced traders.
Education
Options come in many flavors, and I break down the main types you can trade: equity, index, commodity, forex, binary, and American vs European options.
Have you ever entered an options position and had difficulty understanding how the price fluctuates? Perhaps you were confused by the amount of profit or loss caused by stock movement relative to your position? If this has ever happened to you, you could learn more about delta, and how long delta strategies fits into your trading strategy.
The Iron Condor is a very useful options trading strategy. While considered "advanced" by many, once you get a good handle on the iron condor, traders at any level can use it. This options trading strategy is especially useful for profiting off of stable markets that are experiencing sideways price movements. Next up ........Iron Condor Explained.
Although volatility is often spoken of in the financial press as undesirable, long straddles are one case where you can profit from it. If you foresee major price swings in the near future. Time to learn about long straddles.
The catch is if your strategy is not well planned or implemented with discipline. Meaning that what makes the 3 factors so definitive when trading credit spreads is implementing a brilliant strategy with fidelity.
I explain what a put credit spread (bull put spread) is using an insurance analogy and real numbers, plus when to use this income-generating strategy.
A beginner’s guide to put options that uses a simple laptop analogy and real stock examples to explain how traders use puts for protection or profit.
A beginner’s guide to call options that uses a simple tractor analogy and real stock examples to explain strike price, premium, expiration, and the risks.
Wall Street is the domain of traders and investors. Typically we envision traders sitting in front of rows of monitors looking to make a quick buck by continually getting into and out of financial positions. In contrast, investors are the Warren Buffett types who buy and hold stocks for long periods of time.
