Stock Option Trading Education
- Front Month Option Expiration: The nearest term stock option is referred to as the front month. In a four-week expiration cycle,... 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
- Option Exercise Price: An option exercise price is the price level where the option starts to take on intrinsic value. It... 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
- Put Option & Equity Puts: A put option gives the buyer the right, but not the obligation, to sell the underlying stock or... read more
- 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
- 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
- Accelerated Time Decay: Accelerated Time Decay refers to options that have less than a month to maturity decay at an... 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
- 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 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
- Married Puts Options Strategy: In a married puts option strategy, the investor owns shares of stock and purchases an equal number... read more
- Option Strategy: Options are one of the most dynamic investment vehicles available to traders and investors. Option... 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
