Options Trading Basics
Call And Put Options Explained: A Beginner’s Guide
When you hear the word “options,” your first thought might be “high risk” or “too complex.” And for many years, that’s how it was portrayed—especially to long-term investors who were taught to just “buy and hold” and wait. But times have changed. With the right knowledge and approach, options can be one of the most […]
Position Sizing vs. Stop Loss: A Battle
Trading success depends on two important elements: position sizing and stop losses. These fundamental components work together like a financial tug-of-war, each pulling in its own direction to protect a trader’s capital. Position sizing determines how much to risk, while stop losses dictate when to exit. Understanding how these elements interact can mean the difference […]
A Safety Net For Your Stocks: Meet The Protective Put
How would you like a little insurance in case one of your stocks takes a turn for the worse? If that sounds appealing, consider a protective put. At its core, a protective put is exactly what it sounds like—protection. It allows you to hang on to the potential gains from a stock you own, while […]
Tick-Tock! How Time Decay Erodes Your Options Profits
Welcome to the relentless march of time, where your options contracts age like milk, not wine. That pesky phenomenon called “time decay” ensures that as expiration creeps closer, your options lose value faster than a streaming service losing subscribers after a price hike. The brutal truth? You can predict a stock’s movement with eerie precision […]
Short Put Options Strategy Explained
Editor’s Note: If you’d like to buy a stock at a lower price than it’s currently offered on the market while getting paid to wait until it drops, you should consider a short put strategy. A short put can be confusing because you’re short an option that people naturally view as a short position anyway. Traders […]
Finding Support And Resistance Levels: Complete Guide
In the world of trading, support and resistance levels act as the market’s natural floor that can indicate where prices may tend to pause or reverse. Learning how to find support and resistance levels starts by studying past price behaviors, noting areas where prices have historically been bounced from, and by using tools like trend […]
The Many Uses Of Option Delta
In an option chain, the delta for a given option strike price can vary from -1 to +1. Call options have a positive delta for option buyers somewhere between 0 and +1. Calls increase in value when the underlying increases in value. Put options have a negative delta somewhere between 0 and -1 as Put […]
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 […]
Death, Taxes, And Time Decay
Few things are certain in life. But as the old saying goes, there is nothing quite so certain as “death and taxes”. As an Options Trader, I would enthusiastically add option time decay to that list. Options offer traders and investors more leverage and risk mitigation than just purchasing shares outright. For example, if I were to […]
Are You An Options Buyer Or An Options Seller?
Options are an increasingly popular financial product that gives traders numerous ways to manage risk while significantly leveraging capital. They are a powerful trading “tool” that can be bought, sold, and combined in a seemingly limitless number of ways to achieve a specific objective. One of the bigger questions for new — and even experienced […]
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 […]
