Stock Option Trading Education
- Types of Option Spreads: An option spread is created when a trader simultaneously buys and sells options with different... 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
- Index Options and Indices: Index options include baskets of stocks that are combined from group or sector indices. The most... 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
- 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 Pricing Models - Black Scholes: The Black-Scholes Option Pricing Model is a financial model thatl was developed in 1973 by Fisher... 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
- 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
- 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
- Back Month Options Expiration : Back month stock options have more than one month before they expire. They are slightly less... 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 Ask Definition: An option ask is the price an option seller wants to receive for the option. If the option is... read more
- Options and Time Value: The Time Value of an Option is the amount by which the price of a stock option exceeds its... 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
