When dealing with options, almost anything is possible. In fact, options traders often talk in terms of buying and selling time. Unfortunately, they're probably talking about time premium, and so the search for the fountain of youth must continue! The trading of time premium is typically done using Calendar Spreads (although you will also hear them referred to as Time Spreads or Horizontal Spreads)…
We explore examples of how to construct vertical option spreads…
A Vertical Spread is an options strategy in which options are bought and an equal number of options of the same type (Puts or Calls) are sold with different strike prices, but with the same expiration date. Vertical Spreads are directional strategies and are either bullish or bearish. Click on this article for more information on how to trade the extremely versatile vertical spread…
How to trade short straddles and strangles delta neutral. In addition, we also discuss how to expand your straddle and strangle positions into an "Iron Condor."
Straddles and strangles are popular option positions that allow traders to profit regardless of market direction. These positions are usually discussed from the long side, but there is another side to this story – the short side. This article will explore the pros and cons of selling premium by shorting straddles and strangles.
Are options too speculative for your portfolio? Do the majority of options traders lose money? Are options a zero sum game? Are you better off selling options rather than buying them? The answers to these and other questions can be found inside…
alkjdflkajlfdk
I am constantly amazed by some of the "facts" I hear about options that are told to me as if they were written in stone. When I try to probe a little deeper to find the source, I usually receive a nebulous answer like "I know it's true, but I don't where I heard it." Well, today I'm going to clear up some of those issues…
The real question is not how to keep a position delta neutral, that's fairly easy, but rather when to make the adjustments. This is where some art gets mixed in with the science…
a;okdjfaldkf
Exploring the impact of delta adjustments on delta neutral options positions…
The consequence of having a position that is delta neutral is that for small changes in the price of the stock, the total value of the position does not change. Note the emphasis on the word small. In effect, by making a position delta neutral, we have eliminated, or at least reduced, the impact of a change in the value of the stock on the value of the position.