Stock Option Trading Education
- Intrinsic Value and Option Trading: For in-the-money call options, intrinsic value is the difference between the stock price and the... 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
- Types of Option Spreads: An option spread is created when a trader simultaneously buys and sells options with different... 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
- Married Puts Options Strategy: In a married puts option strategy, the investor owns shares of stock and purchases an equal number... 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
- : An option contract gives the buyer of the option the right, but not the obligation to buy (call)... 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
- 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
- Back Month Options Expiration : Back month stock options have more than one month before they expire. They are slightly less... read more
- Iron Condors: An iron condor is typically a non-directional option spread where the trader sells an out of the... 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
- Time Decay and Options: Stock options are a wasting asset. From the day you purchase them, their value goes down if the... 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
