Stock Option Trading Education
- Option Bid/Ask Spreads and Liquidity: The Option Bid/Ask Spread is the difference between the stock option bid price and the ask price.... read more
- Time Decay and Options: Stock options are a wasting asset. From the day you purchase them, their value goes down if the... read more
- Back Month Options Expiration : Back month stock options have more than one month before they expire. They are slightly less... read more
- Synthetic Put Position: Option traders often construct synthetic put positions to hedge their short stock positions. When... read more
- Out of the Money (OTM) Options: A call option with a strike price that is much greater than the current stock price is considered... read more
- Butterfly Option Spreads: In a Butterfly Spreadstrategy, all of the expiration months are the same. A trader buys a call... read more
- Option Ask Definition: An option ask is the price an option seller wants to receive for the option. If the option is... read more
- Time Premiums, Value and Volatility: A time premium is the amount by which the price of a stock option exceeds its intrinsic value. If... read more
- Options Listed on Multiple Exchanges: Multi-Listed Stock Optionsare stock that have options that are listed on more than one exchange.... read more
- Option Expiration Month & Lifespan of Options: Options have a defined life and option traders select the duration that matches their forecast.... read more
- Accelerated Time Decay: Accelerated Time Decay refers to options that have less than a month to maturity decay at an... read more
- Option Pricing Models - Black Scholes: The Black-Scholes Option Pricing Model is a financial model thatl was developed in 1973 by Fisher... read more
- Definition of Option Theta: An Option Theta measures the rate of decline in a stock option due to the passage of time. Theta... read more
- Married Puts Options Strategy: In a married puts option strategy, the investor owns shares of stock and purchases an equal number... read more
- Definition of Option Delta: An option delta measures the change in the price of a stock option relative to the change in the... read more
