Education

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…

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…

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!…

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…

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…

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…

This is a spread trading strategy that involves buying and selling options, but the trader typically sells a greater number of contracts sold than what is purchased. See also Ratio…

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…

Options Ratio is basically the number of puts traded divided by the number of calls. It can be applied to an individual stock, a sector, an index, or an entire…

Parity is basically a set of rules of equality that exist in the options market. For example, long stock and long puts is the as owning long calls. Parity generally…