Stock Option Trading Education
- 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
- Options in the Money: A call option is where the strike price is lower than the current price of the stock is considered... read more
- Diagonal Option Spread: A Diagonal Spread is an option spread where the trader buys a longer-term option and sells a... read more
- Options Listed on Multiple Exchanges: Multi-Listed Stock Optionsare stock that have options that are listed on more than one exchange.... read more
- Butterfly Option Spreads: In a Butterfly Spreadstrategy, all of the expiration months are the same. A trader buys a call... read more
- Index Options and Indices: Index options include baskets of stocks that are combined from group or sector indices. The most... 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
- Strategy for Synthetic Call Options: In a Synthetic Call Option, the investor can create a pseudo call position by buying puts that... 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
- 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
- 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
- Option Premium Pricing and Intrinsive Values: An option premium is the price of the stock option. It is comprised of intrinsic value and time... read more
- Option Trading for Investment, Speculation and Hedging: Option trading involves investors and speculators buying and selling stock options before they... 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
- Front Month Option Expiration: The nearest term stock option is referred to as the front month. In a four-week expiration cycle,... read more
