Statistical Volatility

Combination positions are positions in more than one option at the same time. Spreads and straddles are two types of combination positions. A spread involves being both the buyer and writer of the same type of option (puts or calls) on the same underlying interest, with the options having different exercise prices and/or expiration dates….

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.

I’ve been asked and have explained The Wheel strategy many times, so I thought it may be a good idea to write it down all in one place for posterity! This is the only options strategy I use and IMHO it is about as low risk and reliable as options trading gets. You will NOT get…

This is a large equity trade consisting of 100,000 or more shares.

This is when you buy a Put and sell another Put with a lower strike price. You would only use this spread if you are expecting the underlying stock to move up moderately because it will help you to benefit from the time decay. For example, let’s say you are anticipating a moderate rise in…

A call option is deep in-the-money when the strike price is well below the current market price. A put option is deep-in-the-money when the strike price is much higher than the current market price. On the Option Chain below, box “A” shows us the Deep in the Money Calls and box “B” shows the Deep…