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Covered calls are popular among investors looking for a conservative way to generate additional income from their stock holdings. However, it’s essential to understand...
What’s the Difference Between SPX and SPY Options? Dividends Dividends are not normally paid to options holders. However, SPY pays a dividend every quarter....
A few weeks ago we introduced a new strategy to our members. While a double diagonal spread is a well known strategy, we are...
This article was written by Chris Young and was first published on Epsilon Options (now part of SteadyOptions). Below we’ll build up this payoff...
We’ll also provide some tips on how to pick the right strategy for your trading goals and risk tolerance. So whether you’re looking to...
Here’s our guide to this phenomenon and its uses in options trading… Implied Volatility Skewness Background Implied volatility (IV) describes the market’s expected volatility...
Why to prevent drawdowns? Here are some of the key reasons: Preserving Capital: When a portfolio experiences a drawdown, the value of the portfolio...
For the option buyer, the opposite is true. By owning an option, the trader has the potential to score a big profit—if the underlying...
For example: You see a credit spread with a market of $1.00 bid and $1.60 ask. There is little chance of selling the spread...
There are benefits to delta-neutral trading. One of the primary benefits is that it can help you minimize your risk. By hedging your portfolio...
Looking at a common situation, suppose that you have written a covered call. You owned 300 shares of YFS (Your Favorite Stock Inc.), watched...
For example, if the SPDR S&P 500 ETF (SPY) trades at $396 per share, we expect a significant move in the S&P 500. Still,...
When I first started trading, online brokers were just starting to emerge, and my choices were limited. I remember spending hours watching CNBC, trying...