Stock Option Trading Education
- Back Month Options Expiration : Back month stock options have more than one month before they expire. They are slightly less... 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
- Options in the Money: A call option is where the strike price is lower than the current price of the stock is considered... 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
- 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
- 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
- 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
- Strategy for Synthetic Call Options: In a Synthetic Call Option, the investor can create a pseudo call position by buying puts that... read more
- When Options Trade at a Discount: An option that is trading below its intrinsic value is trading at a discount. For instance, a $50... read more
- Butterfly Option Spreads: In a Butterfly Spreadstrategy, all of the expiration months are the same. A trader buys a call... 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
- 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
- Option Exercise Price: An option exercise price is the price level where the option starts to take on intrinsic value. It... 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
- Synthetic Put Position: Option traders often construct synthetic put positions to hedge their short stock positions. When... read more
