Options Trading Lessons: Vertical Spreads

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Options Trading Lessons: Vertical Spreads

By Administrator on Monday, October 20th, 2008 | No Comments

There are two main types of vertical spreads. There is the vertical call spread and the vertical put spread. Each spread allows you to do two things. First, you can buy it, making you long the vertical spread. Second, you can sell it making you short the vertical spread. Both can be employed to take [...]

Stock Market Trading Strategies: Step Four of the Wyckoff Method

By Administrator on Sunday, October 19th, 2008 | No Comments

In step four of the Wyckoff Method, Wyckoff tells us to determine a stocks readiness to move. Taking a position in an issue that has not or has not nearly completed it preparation for its next move is wasteful and dangerous. It is wasteful in that funds committed to a position that is not making [...]

Forex Trading: Currency Exchange Tutorial

By Administrator on Saturday, October 18th, 2008 | No Comments

So, you want to learn how to trade currency on the foreign exchange market? The process of trading currencies appears very straight-forward on the surface; but, there is more to it than meets the eye.The currency trading tutorial you’re about to receive here will give you a basic idea of how things works. However, you [...]

Trading Energy Markets – for Big Consistent Profits

By Administrator on Saturday, October 18th, 2008 | No Comments

If you have never considered trading energy markets then think again – Because they can yield fantastic profits as the recent bull move in crude oil has shown.Here we will go through the basics and show you how to trade energy markets for maximum profit potential.The worlds most actively traded commodity groupThe energy markets are [...]

Options Trading Mastery: Time Decay and Volatility Trading Opportunities

By Administrator on Friday, October 17th, 2008 | No Comments

When vertical spreads are mentioned, they quite often come with monikers such as ‘bull’ and ‘bear’. This lends most to think of vertical spreads as directional plays which is true. However, vertical spreads can be used to take advantage of two other potential trading opportunities – time decay and volatility movement.If you are looking for [...]

Options Trading Mastery: Rolling the Position

By Administrator on Friday, October 17th, 2008 | No Comments

The selection and management of a vertical spread are only two-thirds of the game. Closing out, rolling or morphing the position has to be analyzed and executed with the same due diligence.Looking at the closing out of a vertical call spread, we find there are three possible outcomes. The spread can finish out-of-the-money and valueless. [...]

Options Trading Mastery: Spread Prices

By Administrator on Friday, October 17th, 2008 | No Comments

Vertical spreads will trade between its minimum and maximum values – zero and the difference between the two strikes. In the case of a vertical call spread, the spread will trade closer to zero when the stock trades closer to or lower than the lower strike price. The spread will trade closer to maximum value [...]

Financial Spread Trading: an Introduction

By Administrator on Wednesday, October 15th, 2008 | No Comments

In the past, trading on the movement and price direction of financial markets was largely the preserve of major banks, high net worth individuals and sophisticated investment houses. However, the advent of online applications like the Internet has now made it possible for retail investors with limited capital to trade worldwide financial markets in exactly [...]

Options Trading Lesson: Volatility

By Administrator on Monday, October 13th, 2008 | No Comments

To get a firm grasp of volatility’s effect on vertical spreads, let us examine three spreads against different implied volatilities while keeping the stock price constant at 67.5. These are the 60 – 65, 65 – 70 and 70 – 75 call spreads.In-the-Money Vertical SpreadsLooking at the in-the-money spread (June 60 – 65), we see [...]

Options Trading Mastery: Vertical Spread Recap

By Administrator on Sunday, October 12th, 2008 | No Comments

Vertical spreads can have various names. The same vertical spread could be called several different things by several different people. We have used two terms only: vertical call spread and vertical put spread. Each of these two spreads allows for two positions, long and short.The long vertical call spread is constructed by buying one call [...]

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