June 4, 2010 Options: The Basic Concepts Today I'm taking a shortcut. I've written an e-book that is available at no cost. It's an introduction to options - the basic concepts. I'm asking each of you who is interested in seeing this blog develop as ...
June 7, 2010 The Exercise Assignment Process When you own an option, you have the right to exercise. Important: You have the right - not the obligation. As previously mentioned, you are going to be better served to sell your options when you no longer ...
Jun 9, 2010 Strategy for an Investment Club : Buying Calls Part I I've discussed what an option is and what you can do when you own an option. Today let's take a look at a simple strategy that is appropriate for most investment clubs. ...
June 11, 2010 Strategy for an Investment Club : Buying Calls Part II See Part I in the previous post The LIKE Sep 50 call (from the example) may cost $800. When the stock is $57, it is 7 points above the strike price. That ...
June 14, 2010 Starting at the Beginning For readers who came here looking to start at the very beginning, I tried to provide some background before doing that. It's time to present the options story for the person who knows essentially nothing about using options. ...
June 16, 2010 What is a Strategy (continued) When using options, you employ a strategy , which is simply a description of which options to buy and sell. Last time we talked about buying a call spread, in which you buy one call option and ...
Jun 18, 2010 Expiration Date In discussing the call spread, it was noted that both options (that comprise the spread) expire on the same date. That date is knows as the options expiration date. There one expiration date every month, and that's Saturday, one day ...
Jun 21 2010 Describing an Option When you buy or sell an option, it is important to be able to describe that option so there is no doubt as to which option you want to trade. We already know that any stock - perhaps AAPL ...
Jun 23, 2010 Why Would Anyone Buy a Stock Option When buying a put or call option, the trader's usual objective is to earn a profit. That may seem obvious, but investors also buy options to hedge, or reduce the risk of owning, other positions. ...
June 25, 2010 Why Would Anyone Sell a Stock Option? When you sell an option, you are granting certain rights to the option buyer. The major right is the ability to force you to buy or sell stock from that option holder - at a ...
Jun 28, 2010 Sizing a Trade It is often difficult for a new options trader to get a feel for how many options to trade. Trading an appropriate number of contracts is important to your success because it is the easiest method used to manage ...
Jun 30, 2010 Volatility Volatility is the property of a stock that describes its tendency to undergo price changes. More volatile stocks undergo larger or more frequent price changes. Outside the options world, volatility is described by the term beta , which is a measure ...
Jul 2, 2010 The Versatile Option Options have many uses and are versatile investment tools. Some uses for options: To buy stock at a lower price (below current market price) To sell stock at a higher price (above current market price) To bet on the ...
Jul 7, 2010 Selling Naked Puts Selling n aked options is considered to be a risky proposition by most people who understand how options work. However, there is one situation in which selling an uncovered option is a play I can endorse. When you sell ...