An investment portfolio generally comprises diverse assets like stocks, ETFs, mutual funds, and bonds. Although it offers numerous advantages, investing and trading in options, an additional asset class, is far riskier than regular equity investments. However, specialized options trading strategies like the covered call strategy can minimize risk and limit losses. Selling covered call options, […]
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Most option traders are familiar with selling covered call options on stocks that they already own in their portfolio to generate cash flow, but what if an investor wanted to generate income from stocks they want to own in the future? Have you heard of selling puts for income? Selling a naked put option is
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In options trading, a vertical spread option play is created by buying and selling multiple options on the same underlying stock, with the same expiration date but with different strike prices. They can use either all call options or all put options. The vertical name comes from the trading sheets that were once used in
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OTM is short for out of the money in options trading. This refers to the moneyness of an option contract, the relationship of the current price of the underlying asset to the strike price of a call or put option contract written on that asset. An out-of-the money option has a strike price far from
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What is delta in options? The delta of an option is part of the option Greek pricing model and prices in the magnitude of the move in the underlier that the option will capture based on the odds of the option expiring in-the-money. Option delta is represented as the velocity of a price change in
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Below is a list of the current most active options traded as of Apr 22, 2021. Stocks: Symbol/ Contracts/ %Calls/ %Puts/ Daily Vol% T 382425 83.61 16.39 1113.47 TSLA 317955 66.93 33.07 124.15 AAPL 194653
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A put credit spread attempts to make money through selling put option premium and having the stock price move higher or stay in the profitability zone by expiration. A put credit spread can be closed with a profit at any time until the expiration date of the puts in the option play. The bull put
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IV crush stands for implied volatility crush and is a description of what happens to options vega premium when it drops dramatically out of the pricing model of an option chain. This usually happens after a major risk or news event has passed for the underlying stock or market for the option contract. The most
Option contract prices will increase as the probabilities of them expiring in-the-money are greater and will go down as the probabilities of them expiring in-the-money decreases. As options get closer to being in-the-money they capture more of their underlying assets move, as they get farther away from being in-the-money they capture less of their underlying
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A cash secured put is created when a put option is sold to open at the same time as capital in an account is designated to buy the underlying stock at the strike price if the put expires in-the-money and is assigned to the option writer. A cash-secured put can be written as an at-the-money
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