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…
A physical delivery option gives its owner the right to receive physical delivery (if it is a call), or to make physical delivery (if it is a put), of the underlying interest when the option is exercised.
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…
Time value is whatever the premium of the option is in addition to its intrinsic value. Time value is that part of the premium that reflects the time remaining before expiration. An American-style option may ordinarily be expected to trade for no less than its intrinsic value prior to its expiration, although occasionally an American-style…
What is an Option Sweep? An option sweep is basically when a big trader breaks up a large order into small individual trades. This is usually done in order to get filled fast or to conceal a large order. The common thinking is that a sweep usually means a big trader knows something and is…
This is a measure of a stock’s volatility relative to the S&P 500 Index. High Beta stocks have high volatility. Stocks that have a beta reading of 1.00 or greater tend to move faster or are more volatile than the S&P index. And stocks that have a beta less than 1.00 tend to move slower…
