Tag: Options

Options Pricing

Options Pricing – How it Works

  Figuring out the value of a stock or bond is a pretty straightforward problem. For stocks, the price of the shares is directly tied to the underlying value of the company. Successful companies that project strong forward sales growth will be rewarded with a high valuation and rising share prices. For companies bogged down […]

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Index Options vs Stock Options

Index Options vs Stock Options Explained For Beginners

  Many novice options traders are initially confused by the difference between the options on cash indices like SPX and the options traded on stocks and ETFs like AAPL or SPY. After all, you can’t trade indices like SPX on the stock market. It’s just an index!  So let’s settle a few differences. Firstly, why […]

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What Are Stock Options

What Are Stock Options?

  What Are Stock Options? Isn’t it nice having options?  If you’re hungry, you have a wide variety of restaurants to choose from. If you want to buy a car, you have different makers producing different models with an endless array of upgrades. It’s true that too many choices can sometimes cause paralysis by analysis, […]

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What Happens to Options During a Stock Split

What Happens to Options During a Stock Split?

  If you have noticed that the number of option contracts you own on a stock that has recently split has changed, don’t panic. When a stock splits, due to a corporate action, several components of an option contract can change to make you whole. Recently both Apple and Tesla announced stock splits which have […]

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Bermuda Option

Bermuda Option: What they are and How they Work

The Bermuda Option is becoming more popular so read on to see how it works and why it’s different than more conventional types of options. What are Options? An option is a contract that gives an investor the right, but not the obligation, to buy or sell an underlying financial instrument like a stock, exchange-traded […]

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How To Swing Trade Options

How To Swing Trade Options

Learning to trade sophisticated securities can both boost your returns and protect your portfolio from a decline. Not only do derivatives make great hedges for stock investments, but futures contracts allow traders to place bets on pretty much everything. You can buy contracts based on the price of gold, oil, coffee, or even livestock. So […]

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Unusual Options Activity

How to Trade Unusual Options Activity

Back in the days when most trading was done on the floor, traders identified an unusual options activity (or any security for that matter) was through open outcry: shouting and hand signals. When the level of activity within an option dramatically picked up, that was a sign that someone was loading up, and probably knew […]

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How to Day Trade Options

How to Day Trade Options in 2020

Day trading options has become has become increasingly popular in recent years for a number of reasons. The chance of a much higher rate of return is the main reason. Options offer several other benefits and, if used wisely, are an excellent way to help day traders reach their financial goals. If you are considering day trading options, […]

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