Why is it Important to Understand Stock Option Greeks?

Archive for the ‘Investing’ Category

Why is it Important to Understand Stock Option Greeks?

By Administrator on Wednesday, January 21st, 2009 | No Comments

We often hear people saying that trading or investing in options is very risky. Yes, it is certainly no mean feat to trade or invest, using options as your investment vehicle. But is it really that risky in the first place? If trading or investing in options is really risky, then why are there so [...]

Is Stock Option Trading A Profitable Investment Option?

By Administrator on Saturday, January 3rd, 2009 | No Comments

A lot of traders now favor option stock trading because of its many advantages. For one it can be highly profitable if used rightly, it offers the investor more flexibility and a larger option to diversify. This trading system offers more protection to the portfolio gives more control to the investor and offers a higher [...]

Trading Stocks Online

By Administrator on Saturday, December 20th, 2008 | No Comments

Nowadays, it is certainly hard to go to a book shop and not come across numerous books on stock market trading for the newbie or even to go on the net and not come across a couple brochures about some restricted advice to make it BIG in this activity. All of them contend and swear [...]

Stock Options – the Greatest Wealth Building Tool Ever Invented

By Administrator on Tuesday, December 9th, 2008 | No Comments

It is a well known fact that serious investors seeking long term growth of capital have as their main objectives the two most basic goals in investing:• to find an investment vehicle that would effectively preserve capital and minimize risk in the face of a fluctuating and constantly flexing economy• the investment vehicle must provide [...]

Options Trading Lesson: Spread Trading

By Administrator on Wednesday, November 5th, 2008 | No Comments

In options trading, there are some basic lessons that are the backbone of many other successful options trading strategies. How to engage in spread trading in options trading to enhance potential gains is one of these lessons.Spread trading is a foundational tool that you should have in your options trading toolkit. It will allow you [...]

Options Trading Mastery: Vertical Spread Test Scenario

By Administrator on Wednesday, November 5th, 2008 | No Comments

Let’s put together what we’ve been talking about, develop an imaginary spread scenario and set it in real life events.In October, let’s say that you begin to hear about IJK stock. It looks interesting, so you then use a variety of sources to learn about IJK: news, charts, outside analysts, internet research etc. From your [...]

How to Calculate the Volatility of the Spread in Options Trading

By Administrator on Wednesday, November 5th, 2008 | No Comments

To be able to calculate the volatility of the spread, we must equalize the volatilities of the individual options.First, let’s move the June calls by moving June’s implied volatility down from 40 to 36, a decrease of four volatility ticks. Four volatility ticks multiplied by a vega of .05 per tick gives us a value [...]

Forex Currency Trading

By Administrator on Wednesday, November 5th, 2008 | No Comments

There are lots and lots of FOREX currency trading platform online these days and it is hard to choose the best from all these trading platforms. The most important criteria you need to know when choosing these trading platforms are the competitive spreads. The more competitive spread these platforms have the better. So what are [...]

Options Trading: Intrinsic Value and the Vertical Spread

By Administrator on Wednesday, November 5th, 2008 | No Comments

An investor must always keep in mind that vertical spreads have an intrinsic value. This means it is possible to consider them ‘in the money.’ If a vertical spread has an intrinsic value, it can also have an extrinsic value. Unlike maximum intrinsic values that equal the difference between the strikes at expiration, maximum extrinsic [...]

Example of a Bull Call Spread

By Administrator on Sunday, November 2nd, 2008 | No Comments

Written on 15th February 2008 (see below for further updates)I thought I’d provide an example of a Bull Call Spread (BCS) using the Commonwealth Bank as an example. There is a lot of volatility in the market at the moment. If you have studied my course then you will know that high volatility is a [...]

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Archive for the ‘Investing’ Category