Stock Option Trading Education
- 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
- LEAP Options & Expiration Dates: LEAP stock options have more than six months until expiration. They can have a lifespan of up to... read more
- Butterfly Option Spreads: In a Butterfly Spreadstrategy, all of the expiration months are the same. A trader buys a call... read more
- 10 up Option Market Definition: Ten-up Option Market - Market Makers provide liquidity and they are members of the exchange. They... 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
- Types of Option Spreads: An option spread is created when a trader simultaneously buys and sells options with different... 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 Vega: An Option Vega measures the change in the price of a stock option relative to a 1% change in... 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
- 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
- Time Decay and Options: Stock options are a wasting asset. From the day you purchase them, their value goes down if the... 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
- Index Options and Indices: Index options include baskets of stocks that are combined from group or sector indices. The most... read more
- Iron Condors: An iron condor is typically a non-directional option spread where the trader sells an out of the... 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
