Many stock traders are jumping into options trading. Options offer a fantastic way to diversify and to produce extraordinary returns. Let’s look at the key differences between options and stocks, and why so many stock traders are becoming options traders.
The short calendar spread is a good opportunity to profit from a stock’s impending upswing or decline. The maximum gain from the investment is the net credit received when entering the trade, and the maximum loss could be substantial. Therefore, this option strategy should only be used by experienced traders.
An introduction to the butterfly spread, a neutral low-risk options strategy using four contracts to profit when a stock’s price stays stable.
Once again it is time for our monthly summary of trades I closed. Below are the put credit spread trades I closed in September 2017. My birthday month!! Compared to August a number of put credit spreads closed this month. Volatility continues to be very low. When volatility is low we have less opportunities to place trades. Click to take a look at the trades.
There are six variables that determine an option’s theoretical value. But, theoretical value is not the same things as market value. The thing that links theoretical and market value together is one key variable out of the whole mix. This one key variable is volatility and it has a huge influence on how an option is going to trade.
Many people think they can quit their day job and start day trading. The truth is, most do not succeed day trading long term. There is an alternative that can generate monthly income just like you hoped to do by day trading. In this post we explore the concept of selling premium in the options market using probability-based options trading.
The short butterfly option trading strategy is a good way to earn small profits, while keeping downside risk to a bare minimum. If you think a stock is set to experience a sizeable move, either up or down, break out your short butterfly playbook.
Paper trading options is one of the best ways I know to learn the ropes risk-free before risking real money, and here is how I put it to work.
Knowing how the Greeks influence premium is not academic. Understanding how they are likely to affect your next trade is a critical component of that trade’s set up. You should always perform an analysis of the Greeks before you send an order to your broker. Here are some important things to look for.
If your a follower of this blog or a follower of my trades you might have noticed I stopped posting trades. That is all about to change starting with this post. I am once again committed to posting the trades I place monthly. The reason for the absence in trade posting is we have been crazy busy preparing for the launch of our new trading platform -- Just not enough hours in the day :(.
