Option
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Advanced Options Trading Strategies: Enhance Risk Management & Profit Potential
Say you have a system for finding and executing stock trades. And maybe that system is working. But if you could make it better, would you? Making it better might mean reducing trade risk, adding
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Hedging Strategies: Balancing Risk and Return for Investors
Stock, bonds, cash—that’s an investor’s standard menu. You put, say, 70% of your money in stocks, 20% in bonds, and 10% in cash. The assumption is that stocks and bonds are somewhat uncorrelated, mean
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Mean Reversion in Volatility: Understanding Its Implications
Implied volatility, and the CBOE Volatility Index (VIX) in particular, have become popular topics among traders and investors. In volatility (“vol”) discussions, one specific term has been gaining cur
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Understanding Penny Increments in Stock Options: Benefits & Spreads
When option price penny increments were introduced in 2007, it was a great moment for online traders. The penny increment meant that bid/ask spreads could narrow to $0.01. And narrower bid/ask spreads
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Understanding Options Expiration: A Comprehensive Guide
In the early days of options trading—two or three decades ago—for market makers in the option trading pits in Chicago and other financial centers, there was one day a month in which attendance was vir
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Understanding Short Selling: A Guide to Put & Call Options
The term “short” has been given a bad rap over the years. And for good reason. Without even knowing what the term means, the average investor listening to pundits and naysayers would have you believe
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Option Butterfly Spread: A Beginner's Guide to Range Trading
What has three legs and flies, especially during range-bound markets? A butterfly option spread. Read on if you’ve not heard this one before.Newly minted options traders often explore single-leg strat
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Understanding Vertical Credit Spreads: A High-Probability Options Trading Strategy
In tennis, as in options trading, different strategies may be appropriate for different environments and different conditions. Sometimes, you see an opportunity that might have a higher risk, but you
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Understanding Implied Volatility: A Guide for Options Traders
Implied volatility is like gravity. You can’t directly observe it, but you know it’s there, and it’s measurable. And it’s pretty important, too. Just as gravity impacts our daily lives, implied volati
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TD Ameritrade thinkorswim: Using the Risk Profile for Options Strategies
If you’re an option trader using the thinkorswim® platform from TD Ameritrade, odds are you’re familiar with the Risk Profile tool. Not only can it provide a single visua
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Navigating Market Volatility: 3 Strategies Using VIX and Volatility Products
If history has taught us anything, it’s that you can expect market uncertainty. But many active traders say that a little volatility can actually be a good thing, especially if you’re prepared. So the
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Calendar Spreads: Profiting in Low Volatility Markets
One of the advantages that options strategies offer is the potential to profit in upward, downward, or range-bound markets. Even in quiet markets where low implied volatility is keeping option prices
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Long Straddle Strategies: Risks & Rewards During Earnings Events
Some traders think a stock’s going to make a move, perhaps because of an earnings announcement or other upcoming event, then they consider buying a call option in case it goes up and a put option in c
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Options Strategies for Low Volatility: Navigate Calm Markets
The stock market ebbs and flows—not just in price, but also in volume and magnitude. Some periods are highly volatile, with lots of price action and price fluctuation. Some would call these markets ex
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Stock Collars: Protecting Your Portfolio During Market Pullbacks
Even in the strongest of rallies, a stock can experience a pullback. Understanding that downturns are a natural part of any market doesn’t make them any more fun. Plus, there’s also the possibility th
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Navigating Earnings Announcements: Smart Trading Strategies
Even veteran traders sometimes feel shy jumping into a stock on one particular day each quarter: the day of the company’s earnings announcement. Stocks often leap and dive more quickly than usual in t
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Spread Trading Strategies: A Comprehensive Guide for Investors
What is a spread trade? The answer depends on the type of investor or trader you are. You could look at spread trading as a figurative bridge across different asset classes (stocks and commodities, fo
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Earnings Season Options Strategies: Navigating Volatility
Earnings season can be a time when stock prices may see larger-than-normal moves. Implied volatility (IV) may also rise to unusually high levels in the days or weeks leading up to an earnings release.
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Decoding the Jobs Report: Trading Strategies & Economic Insights
If you’ve ever tried catching a wave, you know that typically one of three things ends up happening: you catch the wave and ride it, you hold off and avoid it, or, if your back is turned, a rogue wave
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Understanding Volatility in Options Trading: Beyond the VIX
Option traders love to look at and discuss volatility (vol). Many option traders monitor the Cboe Volatility Index (VIX) and try to choose the appropriate options trading strategy for a given lev
Option
- Understanding Deep In The Money Options: A Comprehensive Guide
- Understanding Equity Derivatives: A Comprehensive Guide
- Options Pricing Explained: A Trader's Guide
- Interest Rate Call Options: Understanding the Basics & Mechanics
- Greenshoe Option Explained: A Guide for Investors
- Understanding American Options: A Comprehensive Guide
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Weighted Average Life of Bonds: Calculation & SignificanceThe weighted average life for a bond or another interest-bearing investment refers to the average amount of time for a dollar of principal to be repaid. Bonds with higher weighted average life values ...
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Gold-Backed Cryptocurrencies: A Historical Perspective...
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Decoding Online Reviews: Spotting Genuine Feedback in a Sea of 5-StarsIn the age of online shopping, it just doesn't make sense to buy something without a customer rating. When we can't judge a product by seeing it ourselves, we rely on what other people have to...
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Financial Planning: A Practical Example to Achieve Your GoalsA financial plan tells you where your money should go. It’s a plan for your money and for you to visualize how you will meet your financial goals. Your financial advisor...