A bear put spread is a vertical spread created by buying a put option (long put) at a higher strike price, and selling a put option (short put) at a lower strike price. Both the put options – long and short – must have the same expiration date. In example below, we are buying a $150 Strike Price put and… Read More »What is a Bear Put Spread?
Stock Options Basics
Stock Picking vs ETF – What’s Better for Beginners? If you want to start investing in individual stocks, keep in mind that it is not a walk in the park. There are over 2800 stocks trading on the New York Stock Exchange (NYSE). Picking a handful few to invest in is not an easy task. When you mention someone about… Read More »Stock Picking vs ETFs
The greeks, such as Theta and Vega, of stock options help us explain the price of the stock option contract. These are theoretical concepts, which are directionally correct, but the option price changes are not guaranteed to follow any exact ‘formula’. In this post we will explore the concept of theta of a stock option and also understand what Vega is. What… Read More »The Greeks: Theta and Vega of a Stock Option
The greeks, such as Delta and Gamma, of stock options help us explain the price of the stock option contract. These are theoretical concepts, which are directionally correct, but the option price changes are not guaranteed to follow any exact ‘formula’. In this post we will explore the delta of a stock option and also understand what gamma is. What… Read More »The Greeks: Delta and Gamma of a Stock Option
Why are There Levels in Options Trading? Trading Stock Options is risky. Options provide leverage, that can make quick gains for the traders, but can also make quick losses for them. Brokerages set up levels in options trading as a guardrail to prevent unsuspecting traders from placing trades they do not fully understand and potentially losing money. Level 1 allows… Read More »Levels In Options Trading
What Are Stock Options? Stock options are contracts that give investors the right (but not obligation) to buy or sell a stock at a certain price, before a certain date. Simply put, it’s a method of trading stocks on leverage. For example, when you buy a call option, you buy the contract that will allow you to buy 100 shares… Read More »Stock Options