Tag: options trading
Selling Puts – A Simple Options Strategy
Selling puts is a neutral to bullish strategy. Traders tend to overcomplicate things. This is especially true with options trading where puts and calls can be bought and sold in seemingly endless combinations with cute names like calendars, diagonals, butterflies, iron condors, ducks, lizards, and so on. While more complicated strategies have their place, are […]
Credit Spreads: A Useful Strategy in Volatile Markets
Last week, I started a mini-series on the various aspects of options trading. In the first few articles, I addressed “Calculating Returns” and “Setting up the Proper Risk/Reward.” Today’s focus will be on analyzing profit and probability. In this installment, I’ll cover the use of credit spreads — a useful volatile market strategy — which […]
Understanding Risk-Adjusted Returns When Trading Options
My articles this week on calculating a Twilio (TWLO) profit and Capital One Financial (COF) loss continue generating questions on how profit and loss calculations are applied to overall returns? So, I’ll dive a bit deeper into the topic. It’s a well-known investment maxim that risk is correlated to reward. But, when it comes to […]
Trading Options 101: A Beginner’s Guide
“What is an option?” This may be a question you’ve asked yourself before. If so, options trading might be a suitable investment for you! An options contract offers the buyer the opportunity to buy or sell the underlying asset depending on the type of contract they hold. Unlike futures, the holder is not required to […]
Eight Easy Tips That Can Turn Your Trades From Losers to Winners
There are many profitable option trading strategies, but none of them will work unless you are willing to stick to a set of guiding principles. Several rules I employ are helpful in maximizing profits, limiting losses and, most importantly, taking the emotion out of trading. Below, I will go over my basic trading philosophy, why […]
How Do Options Work? Learn The Lingo, Pros, And Cons
Options trading gets a bad rap for being complicated and risky. But investors don’t seem to care, as options are becoming quite popular. When done right, becoming an options trader can actually ease the risk of owning stocks and generate extra cash for retirement. If your interest is piqued, you might be wondering, “How do […]
Which Is Better: Covered Calls Or Cash-Secured Puts?
Covered Calls and Cash-Secured puts seem to be the most popular choices among traders in finance and stocks. And for a good reason. The two trades in the same market, just on different terms. That’s right. And it all started with the same idea… Both kinds of trading are pretty much the same, except for […]
