This is a spread strategy that involves selling options and buying a greater number of out-of-the-money options.
Backspreads are often in a ratio of 1 to-2 or 2-to-3 and most traders use them because they work well when there is an increase in market volatility especially when they think the market is about to move higher
See also Butterfly Spread, Box Spread, Bear Call Spread
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…
Are Call Sweeps Bullish? The short answer is not always. I have been tracking and trading Unusual Options Activity for many years and I have seen both Bullish & Bearish sweeps on the Call side. What this means is that you can have a sweep order to sell Calls which is essentially taking a bearish…
If you are new to the Thinkorswim platform, it can be a little overwhelming with all the bells and whistles and tabs. One of the things that can be a little tricky at the outset is figuring out how to buy to open and sell to close ( enter & exit) Options trades. But first…
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…
This is a type of options contract that can only be exercised at expiration. Most, but not all, index options settle European Style. The American Style Option has a different exercise schedule.
This is also known as a Crossed Trade and it is basically a transaction/trade that is done from one broker to another ( broker to broker) rather than in the open market place. See Also Option Conversion
