Stock Option Trading Education
- Strike or Exercise Price on Call Options: The strike price (exercise price) is the level at which the buyer of a call option can exercise... 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
- Married Puts Options Strategy: In a married puts option strategy, the investor owns shares of stock and purchases an equal number... 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
- Call Options & Naked Call Writing: A call option gives the buyer the right, but not the obligation, to buy the underlying stock or... read more
- 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
- 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
- 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
- Front Month Option Expiration: The nearest term stock option is referred to as the front month. In a four-week expiration cycle,... 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
- Synthetic Put Position: Option traders often construct synthetic put positions to hedge their short stock positions. When... 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
- 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
- Option Premium Pricing and Intrinsive Values: An option premium is the price of the stock option. It is comprised of intrinsic value and time... read more
- Put Option & Equity Puts: A put option gives the buyer the right, but not the obligation, to sell the underlying stock or... read more
