Tag: time decay

Using Options To Protect Gains While Maintaining Upside Potential

| February 24, 2020 | 0 Comments
Using Options To Protect Gains While Maintaining Upside Potential

The stock market is hitting all-time highs and investors are torn between the possibility of an economic downturn, or entering a new leg of the bull market. Last week’s article noted that money managers were increasingly using call options to gain additional exposure to the stock market.  Some of this behavior might be deemed as a reckless […]

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The Winning Way To Play Options During The Holidays

| December 16, 2019 | 0 Comments
The Winning Way To Play Options During The Holidays

Back in 1992 when I was a market maker on the floor of the Chicago Board of Options Exchange (CBOE) and Board of Trade, a crazy event occurred; Lake Michigan started pouring into underground tunnels and flooding the city in what became known as the Great Chicago Flood. Most of downtown, including the exchanges, were closed for three […]

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What Percentage Of Options Expire Worthless?

| May 17, 2019 | 0 Comments
What Percentage Of Options Expire Worthless?

One of the persistent and pernicious myths regarding options trading is that 80% of all of them expire worthless.  The number relies on the fact that most options get closed well before expiration and can create a misleading belief that selling premium is the only sure way to make money trading options. We’ve all seen the marketing […]

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Options Trading: Is This The Ideal Environment For Calendar Spreads?

| October 3, 2018 | 0 Comments
Options Trading: Is This The Ideal Environment For Calendar Spreads?

In my trading, I usually establish positions with directional bias through the purchase of puts or calls.  This can provide the most leverage and biggest bang for your buck. That is assuming the move you predicted happens in a relatively short time and in a pretty orderly fashion. But as we discussed last Monday, the market seems […]

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Option Greeks

| April 9, 2012 | 0 Comments
Option Greeks

Option Greeks are metrics used to more precisely understand the behavior of an option’s price.  In a nutshell, they measure the sensitivity of an option’s price in relation to several different factors.  Those factors include underlying stock price, interest rate, volatility, and time decay. Traders use Option Greeks to analyze changes in the price of […]

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