To everything, there is a season. Seasons change. For quite a while now, the general level of implied volatility (IV) has been very low. But with last week?s sharp sell-off, IV ticked upward.
Turn, Turn, Turn
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Verticals ? Under and Out
This week we?ll continue following our GLD vertical spread example, and show an illustration of how to plan and execute an exit from a trade that doesn?t do what we wanted.
Vertical Spreads ? Part 2
In last week?s article, I began to talk about Vertical Spreads. These are positions involving one long option and one short option, both of the same type (Puts or Calls) and expiration date, but with different strike prices. Today I want to continue our exploration of these spreads.
Going Vertical
Today we will begin to look at Vertical Spreads.
More on Backspreads and P/L Diagrams
Last week I wrote about Backspreads as a strategy that could be used as an alternative to Strangles and Straddles. This week we?ll look a little deeper, and along the way we?ll take a good look at diagramming as a way to visually analyze a trade.
A Picture is Worth a Thousand Words
That is a familiar saying. In this article, you get both!
Beyond Straddles and Strangles
Recently I?ve been writing here about Straddles and Strangles.
Straddles and Strangles and Stuff, Oh My
Last week I wrote about a situation where we believed that the price of an ETF (XLF) was likely to move quite a bit, but we were unsure of the direction; and we believed that the ETF?s Implied Volatility (IV) was likely to rise. I mentioned that we?d look at two alternative strategies that are often used in this situation.
Zeroing In On a Strategy
As I wrote last week, the three things that change option prices are: underlying price change, the passage of time, and changing implied volatility.
Edging Towards Profitability
Every successful business must have an edge, a consistent source of profitability.
Greeks Coming and Going
Last time we looked at the Greeks related to a covered call position. Theta was the star of that show, and if all went according to plan, the rest wouldn?t matter. ?According to plan? meant that the underlying would move up or go sideways, but would not be above the call strike price at expiration.
More Greeks
Each one of the Greeks tells us how much an option price should change when a specific thing happens.