If nothing else the options market is fair/efficient. We have faith in the integrity of the market, allowing us to focus on our trades and less on the “fairness” of options prices. But what evidence is there to support this?…
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You might be wondering, should I buy options with 30, 60, or 90 days until expiration? The simple answer is: There is no simple answer. Long options are all susceptible to the effects of theta, or time decay, and as…
One of the most electrifying strategies and alluring aspects of trading is the world of options, specifically day trading them. The internet is filled with claims of intense gains, massive success stories, and wild profits. While all of that is…
The bane of the trader who buys options is the passage of time. He knows that every day his position is moving closer to expiration, the day after which the option ceases to exist. All of the time he paid…
Think implied volatility is likely to rise? Want to put on a position that can potentially profit from an increase in IV? Then a long options calendar spread might make sense. A long options calendar spread is comprised of long…
A trader who owns 10 calls controls 1,000 shares of stock. If exercised, those 10 calls turn into long 1,000 shares at the strike price. From this point, the trader will make or lose $1,000 for each $1 change in…
Renowned investor Warren Buffet has the luxury of nearly infinite amounts of money and time to wait until his investments are profitable. This value approach largely eliminates emotional position exits with the confidence and conviction to be patient. The longer…
Delta can be the carburetor for option positions. In the money options, at least those with real intrinsic value, have more fuel to produce power compared to out of the money getting just fumes. You have two choices: ITM (in the…
