Now, let’s consider stock and stock options for a moment. Consider the ubiquitous XYZ Corp., currently trading at $95 per share on 2/1/03. If you pay $4 per share for a March call on 100 shares of XYZ at the $100 strike price, you have acquired the right to buy 100 shares of XYZ for [...]
Is there really such a thing as options trading strategies that work? Surely, there is. All you have to do is discover and learn a few of these trading principles and techniques. While some concepts give us a full view of technical terms, learning the following practices can very well give you tons of rewards [...]
In the stock market industry, the trade for stocks and stock options are often interchanged and many may be confused between the concepts behind these types of trades. However, what you should know is that these two have very different characteristics from each other, and using them interchangeably can be very lethal if you want [...]
An option is a contract to that gives the holder the right to buy or sell currency at a pre-determined price at a specific price. The holder of the contract has the right to exercise the option but is not obligated to. Options are used as a hedge in FOREX transactions; they are [...]
Wouldn’t it be great if we could buy an option with five months left until expiration and sell an option with 2 months left until expiration for the same price? You couldn’t lose. Well we can’t. I love options spreads so much I realized something very important. We can buy a spread that has a [...]
In the last article, you have learn about “delta” . Let us continue…
Gamma: Gamma is derived from Delta is the odds of a change in Delta. It also informs in advance if the Delta could be changing. Gammas are positive for both the call and put. When options are deep in the money of [...]
Options Trading has a reputation for being extremely risky, but this reputation is in large part undeserved. True, option trades are extremely risky – even dangerous if you have no idea what you are doing. However, that is true of all forms of offline or online trading, and trading in options is no exception.
While options [...]
One of the ways to limit risks and increase profits is to buy forex options. In foreign exchange, this is a good way to manage risks in forex markets but opportunities of gaining success are less than 90%. In contrast, there are many ways that you can increase opportunities of success by doing it accurately. [...]
Usually currency or forex options offer you unlimited profits with limited risks, which is a good thing except that there is a 90% chance that the options will expire and become worthless. But despite the risk, which a lot of forex traders are afraid of, there is still a chance that an options seller [...]
Options are one of the oldest trading vehicles man has ever used. Around a 1000 B.C Aristotle Thales predicted by the stars that there would be a bumper olive harvest and bought options on the use of olive presses.
When the harvest did in fact prove to be a great harvest Thales was able to rent [...]