Lately, I have been asked about what I think is the single key that determines if you would make it as a rich man in options trading.
This is an extremely interesting question as I am not someone inclined to believe that any single reason constitutes to the success in anything at all. However, that got [...]
An option contract is an agreement between two parties to buy/sell an asset (In this case, the asset refers to stock) at a certain price and specific date.
It is called an option because the buyer is not obliged to carry out the transaction. If, over the life of the contract, the asset value decreases, the [...]
We all know that many opportunities exist in Option Trading today. Wherever you turn, someone is waiting to inform you of the tremendous profits to be realized within the stock and the futures markets. Nevertheless, many people are unaware of the derivative trading possibilities that are available within and across several different markets.
Option Trading is [...]
Combining technical analysis with options trading is not a typical course of study when learning how to trade options. Option traders who want to maximize the return need to understand how to combine their options analysis with certain market conditions. In this article, I will wade through the reasons why a trader would prefer to [...]
There are two types of options available: call options and put options.
Call options give the taker the right but not the obligation to buy the shares at a specific price on or before a specific date.
The put options give the taker the right but not the obligation to sell the shares at a specific price [...]
The recent stock market crisis (2008) not only rocked the financial system and the world economy but also the pockets of countless options traders all over the world. Options traders who used to profit in the years prior to this market crisis broke their bank as none of their options strategies seem to work in [...]
INTRODUCTION
Having been trading stocks and options in the capital markets professionally over the years, I have seen many ups and downs.
I have seen paupers become millionaires overnight…
And
I have seen millionaires become paupers overnight…
One story told to me by my mentor is still etched in my mind:
“Once, there were two Wall Street stock market multi-millionaires. Both [...]
There is quite a difference between buying stocks outright and purchasing stock options. When you purchase an option, you are betting on the direction of the market. However, option trading has very different characteristics than purchasing shares and there is a lot of terminology and tricks of the trade that a new trader should learn [...]
Backspreads, also known as reverse ratio spreads, are an option strategy utilized when you believe there will be much volatility in the stock but are not 100% sure whether it will go up or down. If the stock moves a lot in the predicted direction, you will earn a tidy profit. If the stock moves [...]
Beyond all the ‘hype’ what is it that makes option trading so good?
This is a question that I wish more people would ask, but the thing is not too many people know they even exist!
The main reason that I love option trading is that options provide the opportunity to turn a small or modest amount [...]