Posts by ivtrades

There are some options settle for cash rather than shares. Indexes like the S&P 500 Index (.SPX) and the S&P 100 Index (.OEX) are examples of cash settled options.

This is when you sell Put options with the intention or to take delivery of the underlying shares. Cash is deposited in the account and, if the stock price falls…

A Calendar spread is when you sell an option and buy another one with a more distant expiration date. This can be created with either puts or calls. For example,…

This is basically a combination of Bull Spread and Bear Spread. The main feature of this strategy us that your risk is fixed and your upside/profit is capped. Selling options…

The point at which a strategy produces no profit and no loss.

A Box Spread is simply a combination of two vertical spreads. These spreads are used by professional Options traders who are trying to take advantage of a situation where the…

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

This is the difference between the current bid price and the current asking, or offering price. For example, if you see a quote that looks like this: 2.05 x 3.10…

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…

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…