Stock Option Trading Education
- Option Bid Definition: An option bid is the price an option buyer is willing to pay for the option. If the stock option... read more
- Four-way Options Spreads: A 4-Way Option Spread is the same as an iron condor spread. The option strategy sells an out of... read more
- Parity and Stock Options: Stock Option Parity means that the stock option is trading at its intrinsic value. If a $100 call... read more
- Intrinsic Value and Option Trading: For in-the-money call options, intrinsic value is the difference between the stock price and the... read more
- 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 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
- Index Options and Indices: Index options include baskets of stocks that are combined from group or sector indices. The most... read more
- Options At the Money: When the stock price is the same as the strike price an option is considered at the money. The... read more
- LEAP Options & Expiration Dates: LEAP stock options have more than six months until expiration. They can have a lifespan of up to... 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
- Accelerated Time Decay: Accelerated Time Decay refers to options that have less than a month to maturity decay at an... read more
- Front Month Option Expiration: The nearest term stock option is referred to as the front month. In a four-week expiration cycle,... 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 Gamma: An Option Gamma measures the change in Delta for every one dollar change in the underlying price... 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
