The cap interval is a constant established by the options market on which a series of capped options is traded. The exercise price for a capped-style option plus the cap interval (in the case of a call), or minus the cap interval (in the case of a put), equals the cap price for the option….
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…
Adjustments may be made to some of the standardized terms of outstanding options upon the occurrence of certain events related to the underlying security. The determination of whether to adjust outstanding options in response to a particular event, and, if so, what the adjustment should be, is made by OCC, taking into consideration policies established…
This is a long post, it helps you understand options a bit better and make some profitable decisions in the future! I try to make theta and options easier to understand by relating it to real estate and moving one step at a time. Let’s dive into the world of Theta and options trading!! #1:…
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…
To anyone new to trading options. You need to understand, this is a craft. A skill. You must learn and respect it, or it is going to disrespect you. Very violently in some cases. You HAVE to know what you’re doing, not just THINK you know what you’re doing. You must understand the Greeks. This is essentially what your option is. If you…
The time Value of Options refers to the value of the options contract beyond its intrinsic value. Time value is equal to the extrinsic value of the options contract. Out-of-the-money options consist only of time value. The value of in-the-money options can include both intrinsic value and time value. See also In The Money Options,…
AUD/USD price alert Price is above $.62166 Last = .62144; Bid = .62162; Ask = .62174; Price = .62168; Vol index = N/A; Front vol = N/A; Back vol = N/A; Vol diff = N/A; Impl vol = N/A; Delta = 1.00; Study = N/A; Sizzle idx = N/A; Close = N/A; commentary = This…
AUD/USD price alert Price is above $.62166 Last = .62144; Bid = .62162; Ask = .62174; Price = .62168; Vol index = N/A; Front vol = N/A; Back vol = N/A; Vol diff = N/A; Impl vol = N/A; Delta = 1.00; Study = N/A; Sizzle idx = N/A; Close = N/A; commentary =…
This is a measure of Historical Volatility computed as the annualized standard deviation of returns over a period of days (20, 30, 90 days). See also Implied Volatility & Historical volatility
