Covered Write

This method is normally used when Options are overpriced. The trader would simply buy stocks in the open market and sell the equivalent position in the options market. This is done because the trader sees that the Options price is too high and anticipates that it will eventually decrease. So he/she decides to cash in…

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 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,…

101 Arch Street, Suite 601 Boston, Massachusetts 02110 BOX Exchange LLC (BOX) is a national securities exchange registered with the Securities and Exchange Commission (SEC) under Section 6 of the Securities Exchange Act of 1934. It is a fully electronic options exchange that offers trading in U.S. equity options. BOX Exchange is operated by BZX…

This is a long post, it helps you understand options a bit better and make some profitable decisions in the future! I try to make theta and options easier to understand by relating it to real estate and moving one step at a time. Let’s dive into the world of Theta and options trading!! #1:…

These are options contract with no intrinsic value. A Call option is OTM when the strike price is above the current market price. A Put option is out-of-the-money when their strike price is below the current market price of the current market price. You should also check out In The Money Options & At the…