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Education

  • The Other Naked

    Posted on 3/10/2010 in Education by Dan Passarelli
    An overview of naked calls
  • Moneyness

    Posted on 3/5/2010 in Education by Dan Passarelli
    It may not be a word, but it's central to understanding options
  • Going Naked

    Posted on 3/4/2010 in Education by Dan Passarelli
    Bullish on your favorite stock? Selling naked puts might be a way to go...
  • Exploring Butterfly Spreads: Part Three

    Posted on 2/25/2010 in Education by Josip Causic
    The final segment in our three-part exploration of the butterfly spread.
  • Cash-Secured Put: An Investment Power Tool

    Posted on 2/18/2010 in Education by Kevin Cook
    Options add versatility to just about any investing idea
  • Delta and Gamma: How Options Move with Stock - Part Three

    Posted on 2/3/2010 in Education by Kevin Cook
    This is the final part of the Delta and Gamma series...
  • Delta and Gamma: How Options Move with Stock - Part 2

    Posted on 2/2/2010 in Education by Kevin Cook
    If it isn't obvious yet, you have to understand delta to grasp gamma. You could probably go on to learn about the other two important "greeks," theta and vega. But you can't really "get gamma" unless you know delta.
  • Delta and Gamma: How Options Move with Stock

    Posted on 2/1/2010 in Education by Kevin Cook
    Part one in a series looking at two of the fundamental Greeks in options trading.
  • What Options Students Want to Know

    Posted on 1/28/2010 in Education by Josip Causic
    Many times I receive interesting questions from our graduates in my email box, and occasionally, I like to share them with our general reading audience. Here are some of the questions that I was asked recently. Some questions are related to the topics of options, others to stop losses, while others are on the topic of ETFs. Hence, in this article there is a bit for everyone.
  • Equity-Dollar Correlation: The Long View

    Posted on 1/27/2010 in Education by Condor Options
    A major story in late 2009 was the negative correlation between equities and the U.S. dollar. It appears the attention has been well deserved: both the 3-month and 1-year rolling correlations are the lowest they’ve been in at least two decades.
  • Exploring The Butterfly Spread: Part Two

    Posted on 1/21/2010 in Education by Josip Causic
    This exposé, the second in a series of articles on the topic of Butterfly spreads, will visually show how to place a Call Butterfly spread using the TradeStation platform. The actual trade is NOT meant to be a trade suggestion.
  • Exploring The Butterfly Spread

    Posted on 1/14/2010 in Education by Josip Causic
    This article is the first in a series of several articles that will address in greater detail the option strategies known as Butterflies. In this one, I am trying to introduce the basic concept of a Butterfly without providing any specific examples. Specific examples will follow in the subsequent newsletters.
  • Tighten Your Collar With Options Insider Founder Mark Longo

    Posted on 1/13/2010 in Education by The Options Insider
    Options Insider readers can view a live webinar today with Options Insider Founder Mark Longo. The subject of the webinar is using options to add income and downside protection to an equity portfolio.
  • Holiday Horizontal Option Spreads

    Posted on 1/5/2010 in Education by Josip Causic
    Let us turn our attention towards Horizontals, which are also known as Time or Calendar spread trades.
  • US Dollar Destiny

    Posted on 12/30/2009 in Education by Sam Evans
    I get plenty of questions emailed to me and I endeavor to answer as many as I can, even sometimes publicly through another one of these articles. However, on numerous occasions I have been asked to give my longer term outlook on the market and I thought that as we are coming to the end of the year, now would be a good time to do so. As this is a Forex article, I thought I would take a look at the good old US Dollar, a central and intrinsic piece of the economic puzzle.
  • Dutiful Deltas and the Gamut of Gammas

    Posted on 12/28/2009 in Education by Josip Causic
    During one of my option classes, some of my students were really having a hard time grasping the concept of the Greeks, namely the Delta and Gamma, as well as their relationship to each other. In this article, I will focus on explaining those concepts to the readers in a similar way that I did for my option students.
  • Exploring Vertical Option Spreads: Part Five

    Posted on 12/7/2009 in Education by Josip Causic
    The goal of this article is to explain the last of the four possible vertical spreads which will bring this series of five articles to a conclusion. Once again, this vertical debit put strategy is not meant to be a trade recommendation for it is just a theoretical explanation...
  • The Bucking Gamma Bull

    Posted on 12/2/2009 in Education by Condor Options
    We've mentioned before that our preference is to close out short option positions before the dynamics of expiration week have a chance to kick in. In a nutshell, while it's true that theta declines more quickly as expiration looms, tempting option shorts to hold on as long as possible, it is also true that gamma rises more quickly closer to expiration...
  • Examining Vertical Option Spreads: Part Four

    Posted on 11/30/2009 in Education by Josip Causic
    In the last two articles I explained two vertical call spreads; namely, Bear Call and Bull Call. As the reader will notice, these two are not grouped by direction, for one is bearish in nature while the other is bullish in its outlook. Most option books out there separate the verticals according to direction: Bullish or Bearish. However, that is a mere matter of preference. As long as the option trader understands that a bearish or a bullish vertical position can be built by either calls or puts, that is all that matters. The fine difference that I use in my option trading, which determines whether to use calls or puts, is determined by (I.V) implied volatility. Let me elaborate on this a bit more...
  • Exploring Vertical Option Spreads: Part Three

    Posted on 11/18/2009 in Education by Josip Causic
    The goal of this article is to walk the readers step-by-step through my thinking process when placing a vertical debit call spread trade.
  • Common Futures Market Misconceptions Explained and Clarified

    Posted on 11/11/2009 in Education by Gabe Velazques
    Common Futures Market Misconceptions Explained and Clarified...
  • Exploring Vertical Option Spreads: Part Two

    Posted on 11/5/2009 in Education by Josip Causic
    In my previous article, I introduced the concept of verticals and defined their four main components. Here I am going to deal with a specific vertical spread that also happens to be one of my favorite strategies. It is known under many different names: Short credit call, Bear Call, or vertical call sale.
  • Exploring Vertical Option Spreads

    Posted on 10/28/2009 in Education by Josip Causic
    This article is the first one in a series of five articles on the topic of vertical spreads. It will introduce the concept of the vertical spread and define its four main components. The subsequent articles are going to deal with individual vertical spread strategies, one vertical spread per article.
  • 7 Reasons That Retail Traders Should Consider Using Futures

    Posted on 10/26/2009 in Education by Sam Seiden
    7 Reasons That Retail Traders Should Consider Using Futures
  • Discipline Transcends Trading

    Posted on 10/20/2009 in Education by Gabe Velazques
    As the title of the piece suggests, discipline indeed transcends trading. It's what we eat (quantity and type of food), how we comport ourselves, and how we go about pursuing our goals. It's making a commitment to achieving what we set out to accomplish, without compromises or excuses. Why would we believe that if we lack discipline in our day-to-day lives, that we would suddenly become disciplined in our futures trading? That's just deluded thinking...
  • Forex Fundamentals & News: The Good, The Bad and The Ugly

    Posted on 10/16/2009 in Education by Sam Evans
    There is a lot of information on trading and I mean a lot. As traders we can use various tools such as charts, news, Fundamentals and Technical Indicators to name just a few. But what are the best ones to use? In a world full of opinion and hypothesis, it can often be difficult to decide on what route to take when speculating in the Forex markets.
  • Iron Condors & Options Premium Juice - Conclusion

    Posted on 10/8/2009 in Education by Josip Causic
    Next, let us look at the option chain and instead of focusing on the selection of the strike prices, let us see if there is any premium worthwhile selling...
  • Vertical Option Spreads and Volatility

    Posted on 9/28/2009 in Education by Josip Causic
    Every once in awhile, students ask me if it is wise to sell verticals on any given product at any time. The answer is much more complex than a simple yes or no reply. In this article, I will explain my thinking when it comes to selling verticals, either Bull Puts or Bear Calls. For a change, I will not focus in this newsletter on the technicals or fundamentals but instead, I will place my entire center of attention on I.V. (implied volatility) of the underlying and three additional option components.