Covered Write

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:…

This is a spread  where the premium received from selling part of the spread is greater than the premium paid for the other part of the spread. For instance, if you sold the AAPL 140.00 Calls @ 4.00 and bought the AAPL 142.00 Calls for 2.00 you have a credit of 2.00. See also Bear…

A block trade is, as the name suggests, a single large order that hits the Unusual Options Activity Tape all at once.  A Sweep is a large order that is broken up and hits the tape in many different small orders.  Here is an example of Block Trade:  And here is an example of a…

The Intrinsic Value is basically the value of an in-the-money option minus its time value. Intrinsic value is the current real tangible value of the options contract. The intrinsic value of a call option is calculated by subtracting the strike price of the Option from the underlying stock. For a put, intrinsic value is the…

This is the process of carrying out the terms of an options contract. A call buyer can exercise his or her right to buy the stock at the strike price. A put owner can exercise his or her right to sell the contract. See also: Exercise Price, Exercise Settlement Value, Automatic Exercise

No.  Investors look to the confirmations and statements that they receive from their brokerage firms to confirm their positions as option holders or writers. An option holder looks to the system created by OCC’s rules, rather than to any particular option writer, for performance of the option he owns. Similarly, option writers must perform their…