This is when you sell Put options with the intention or to take delivery of the underlying shares.
Cash is deposited in the account and, if the stock price falls to the strike price of the put option, you get the delivery of the shares into the account once the Options expire.
The time Value of Options refers to the value of the options contract beyond its intrinsic value. Time value is equal to the extrinsic value of the options contract. Out-of-the-money options consist only of time value. The value of in-the-money options can include both intrinsic value and time value. See also In The Money Options,…
How Do You Find Option Sweeps? There are two ways you can go about finding Option Sweeps: If you go with option 1 then you need to set your filters to look for repeat activity in a stock and then you will have to tabulate the total number of contracts that are bought across all…
This is basically the level of volatility reflected in the current options prices. Each options contract has a unique level of implied volatility that is computed using an options pricing model. The Implied Volatility (IV) is fluid and consistently changing. When the IV is high, it indicates that the option premiums are expensive. When the…
The condor is basically a combination of a bull call spread and a bear call spread. Essentially, options with consecutive strike prices, buying options with a lower exercise price, and options with higher exercise price. The condor is generally created using the same numbers of short and long calls (or puts). You will nee to…
In the case of a physical delivery option, the exercise price (which is sometimes called the “strike price”) is the price at which the option holder has the right either to purchase or to sell the underlying interest. EXAMPLE: A physical delivery XYZ 40 call option gives the option holder the right to purchase 100…
To anyone new to trading options. You need to understand, this is a craft. A skill. You must learn and respect it, or it is going to disrespect you. Very violently in some cases. You HAVE to know what you’re doing, not just THINK you know what you’re doing. You must understand the Greeks. This is essentially what your option is. If you…
