Covered Write

This is an order that you would place to offset an existing long position. For example, If you buy a call option to open a new position, you would then need to offset or close that position with a closing order. This is an order to sell-to-close.

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…

An Iron Butterfly is a trade that is created by putting on a Short Straddle (selling at the money puts and calls) and a Long Straddle (buying out of the money puts and calls). These types of trades limit the amount of money that you can make and it also limits the potential loss. But…

The option writer is obligated—if and when assigned an exercise—to perform according to the terms of the option. The option writer is sometimes referred to as the option seller. An option writer who has been assigned an exercise is known as an assigned writer. Example:If a physical delivery XYZ call option is exercised by the…

The cost of Unusual Options Activity data varies depending on the quality and quantity of the data that you want.  If you want raw data from the exchanges like CBOE then you could easily be looking at a few thousand per month plus other costs. This is usually what institutions and data professionals use.  If…

This is when you sell an options contract and simultaneously buy one with a later expiration date and a higher or lower strike price. For example, if your sell to open the AAPL NOV 145.00 Call and then buy to open the AAPL DEC 150.00 Call , you have created a diagonal spread. See also:…