What is a physical delivery option ?

Tracking Options Flow can be very useful if you know how to take advantage of it. It basically allows you to see what the big traders are doing in real time.  The common thinking is that  these big traders know something that others don’t and are taking a position in anticipation of a move. However,…

A binary option is a cash-settled option having only two possible payoff outcomes: either a fixed amount or nothing at all. Some binary options are referred to as “fixed return options.” As of the date this product was approved for trading, the only binary options approved for trading (other than credit default options, as defined…

Fixed Return Options (FROS) are basically a type of Option contract with a set outcome. These are similar to binary options contracts that would pay out $100 if the contract is in-the-money at expiration and zero if the contract is out-of-the-money.

This is the idea that says that the price of the underlying asset will gravitate towards the point where the most options expire worthless. Some option traders will “trade around” or “trade off of” these levels by Selling Puts or Calls against it.

This is the combination of a Bull Put Spread and a Bear Call Spread. The trade is created by selling a Put and buying a lower strike price Put and also selling a Call and buying a Call with a higher strike price. The short options have consecutive strike prices (short strangle).

A range option is a European-style, cash-settled option that has a payout if the value of the underlying interest falls within a specific range of values (the range length) at expiration. As the underlying interest value increases throughout the range length, the amount of the payout (i.e., the cash settlement amount) of the range option…