Short straddles present an opportunity to make a profit whenever a stock appears stuck in a neutral price zone. This option strategy generates extra income by selling double the usual number of contracts. While the profitability is capped at the amount of premiums received, the potential loss is unlimited.
There are many different types of options. Options are “derivatives”, which simply means that their value is derived from another asset. Consider stock-based options, they derive their value from the stocks that they are based on. In general, derivatives can be based on a huge range of assets. This is true of options as well.
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.
Say hello to Options Cafe! As the Founder and CEO of Stockpeer, and a tenured software developer, I am excited to announce that the Stockpeer.com blog is retiring and Options.Cafe is taking over. When I registered Stockpeer.com nearly 10 years ago, I had a much different vision. While I was trading options, at the time, stocks were my passion.
I like directional trading but for the most part directional options trading is a hobby. There is nothing better than picking a direction, applying a leveraged bet via options or futures, and watching that trade take off. Here I will explain why directional trading is just a hobby.
Options Cafe backtester is here. Have you ever wondered how your options trading strategy would perform over time? I have, so I built a backtester. I wanted a way to simulate trading the options market day to day to see how well my strategies would have fared.
When I first started Stockpeer I expected to mostly share my experiences trading the stock market via automation. But I find myself talking less about automation for an important reason: automation can lead to a lack of engagement—aka complacency.
Recently I have been playing around with something new: trading the futures market as a hedge against my options trading strategy. Why hedge a good bet you ask? Though the strategy I rely on the most—trading put credit spreads on a consistent basis.
