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
- 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
- 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
- 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
- Synthetic Put Position: Option traders often construct synthetic put positions to hedge their short stock positions. When... 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
- 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
- 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 Gamma: An Option Gamma measures the change in Delta for every one dollar change in the underlying price... 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
- 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 Vega: An Option Vega measures the change in the price of a stock option relative to a 1% change in... read more
- Iron Condors: An iron condor is typically a non-directional option spread where the trader sells an out of the... 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
- Put Option & Equity Puts: A put option gives the buyer the right, but not the obligation, to sell the underlying stock or... read more
