http://www.theoptionsinsiders.com Education Articles en-us Copyright 2010 The Options Insider Fri, 30 Jul 2010 04:39:00 GMT 20 Thu, 29 Jul 2010 08:23:00 GMT Options greeks refer to how option values respond to changes in underlying stock price, implied volatility, and time to expiration. http://www.theoptionsinsider.com/Education/?id=5047 http://www.theoptionsinsider.com/Education/?id=5047 Wed, 28 Jul 2010 11:28:00 GMT For a while the major Oil Companies and Drillers were drifting out of the news. The nasty leak from the BP well was not getting constant attention any more as a mostly successful cap was put in place. Four of the largest Oil Companies are beginning a program for rapid response to a spill, all of which is very good. The problem is part of the market is not buying this, yet. http://www.theoptionsinsider.com/Education/?id=5034 http://www.theoptionsinsider.com/Education/?id=5034 Tue, 27 Jul 2010 22:32:00 GMT I was recently asked a question about option trading and the placing of stops. Although I answered that question right there and then, I felt that the topic of stop losses and options needed to be explained in more detail... http://www.theoptionsinsider.com/Education/?id=5021 http://www.theoptionsinsider.com/Education/?id=5021 Tue, 27 Jul 2010 11:43:00 GMT A recent discussion on options was started when this question was asked: If I want to buy a PWER stock option with its high growth because I don and rsquo;t have the money to buy it outright. What things in such a option should I look for and what should I avoid? http://www.theoptionsinsider.com/Education/?id=5025 http://www.theoptionsinsider.com/Education/?id=5025 Mon, 26 Jul 2010 12:20:00 GMT Time to expiration, price of the underlying, implied volatility, historical volatility, puts, calls, delta, gamma, theta, vega, in the money, at the money, out of the money, intrinsic value, extrinsic value, higher commissions, egregious bid ask spreads, no options traded on a stock with a beautiful technical set up, multiple potential beasts and physiologies, LEAPS; why would one even bother with options? If I retain a shred of rationality, an open question to be sure, there must be some reason to complicate my life with these additional variables. http://www.theoptionsinsider.com/Education/?id=5016 http://www.theoptionsinsider.com/Education/?id=5016 Thu, 22 Jul 2010 10:34:00 GMT I learned about one risk of buying LEAPS the hard way. LEAPS (Long-Term Equity Anticipation Securities) are options that expire in a year or more. That means they generally have a lot of time premium built into them. http://www.theoptionsinsider.com/Education/?id=4992 http://www.theoptionsinsider.com/Education/?id=4992 Wed, 21 Jul 2010 08:48:00 GMT Detailed Q and A on this fundamental and vital strategy http://www.theoptionsinsider.com/Education/?id=4979 http://www.theoptionsinsider.com/Education/?id=4979 Mon, 19 Jul 2010 11:54:00 GMT "Delta:" What does it mean and how do you use it? http://www.theoptionsinsider.com/Education/?id=4962 http://www.theoptionsinsider.com/Education/?id=4962 Thu, 8 Jul 2010 10:08:00 GMT Implied volatility is a major determinate of the magnitude of the extrinsic option premium. Considered together with time, these two factors act in concert to define the pricing of the time value (extrinsic value) of options. http://www.theoptionsinsider.com/Education/?id=4891 http://www.theoptionsinsider.com/Education/?id=4891 Thu, 17 Jun 2010 23:09:00 GMT A friend of mine in the futures pit had been having a rough time of late when he asked me a typical question among us traders – How do I come back from a loss? Since he had been having a "rough patch" and not just one bad trade, I gave him the following advice that is to be used over a period of time... http://www.theoptionsinsider.com/Education/?id=4753 http://www.theoptionsinsider.com/Education/?id=4753 Tue, 8 Jun 2010 13:28:00 GMT Attention New York readers!! Mark will be moderating discussion at a High Frequency Trading forum on Wednesday, June 9. http://www.theoptionsinsider.com/Education/?id=4690 http://www.theoptionsinsider.com/Education/?id=4690 Sat, 5 Jun 2010 14:17:00 GMT Options offer a number of unique advantages to the trader, but perhaps the single most attractive characteristic is the ability to control risk precisely and to do so with surgical precision. Much of this advantage derives from the ability to control positions equivalent to stock with far less capital commitment. http://www.theoptionsinsider.com/Education/?id=4667 http://www.theoptionsinsider.com/Education/?id=4667 Thu, 3 Jun 2010 23:40:00 GMT In my most recent option class in Milwaukee, Wisconsin, I was asked a very specific question by one of the students. He was assigned on the sold option even though on the April and s expiry Friday the position, technically speaking, should not have been assigned to him. He asked me the same question that he has asked his broker: "Why was I assigned?!?" http://www.theoptionsinsider.com/Education/?id=4647 http://www.theoptionsinsider.com/Education/?id=4647 Wed, 26 May 2010 23:11:00 GMT One of the questions that often comes up in many of my option classes when teaching the credit spread strategy is what to do with the short leg. This entire article will focus on providing a clear answer to that question, while covering all other relevant details. http://www.theoptionsinsider.com/Education/?id=4595 http://www.theoptionsinsider.com/Education/?id=4595 Tue, 4 May 2010 11:00:00 GMT The recent massive oil spill that now threatens major wildlife areas along the Gulf Coast is a reminder of how "black swan" events can impact our lives in unforeseen and unforeseeable ways. http://www.theoptionsinsider.com/Education/?id=4437 http://www.theoptionsinsider.com/Education/?id=4437 Mon, 26 Apr 2010 01:08:00 GMT This article, on the topic of Covered Calls, will address three things: Buy-Write, Legging In, and the use of the MACD histogram as a timing tool for the sale of Covered Calls. http://www.theoptionsinsider.com/Education/?id=4378 http://www.theoptionsinsider.com/Education/?id=4378 Thu, 22 Apr 2010 23:28:00 GMT Iron condors are a relatively straightforward in the pre-trade analysis and order entry process. It is a high cost strategy to trade so most options-centered brokers have made it easy for traders to execute easily. The difficulty of an iron condor is in the trade management and adjustment process. Effectively managing an iron condor trade when the market is moving is ambiguous and subject to your own personal risk tolerance. http://www.theoptionsinsider.com/Education/?id=4366 http://www.theoptionsinsider.com/Education/?id=4366 Wed, 21 Apr 2010 23:02:00 GMT An iron condor can be designed to accommodate your risk tolerance and account objectives but those adjustments will always have a trade off. As with most option selling strategies this means there is an exchange of a higher probability of a successful outcome and lower premiums or higher risk and larger premiums. http://www.theoptionsinsider.com/Education/?id=4358 http://www.theoptionsinsider.com/Education/?id=4358 Tue, 20 Apr 2010 23:04:00 GMT There are more option strategies than option strategists but at their heart they are all modifications of basically two ideas - buying or selling options. The proliferation of options strategies come from the infinite ways that these two concepts can be combined. Some of these combinations can be great ideas but others are just commission generators with the difference usually resting on how you implement them as a trader. In this article we will start discussing one such combination strategy that is becoming more and more popular with option investors all the time - the iron condor. An iron condor is a combination of a long and short strangle, which is also the same as two credit spreads. http://www.theoptionsinsider.com/Education/?id=4343 http://www.theoptionsinsider.com/Education/?id=4343 Tue, 20 Apr 2010 09:37:00 GMT Confused about options terminology? Join the club. http://www.theoptionsinsider.com/Education/?id=4345 http://www.theoptionsinsider.com/Education/?id=4345 Sat, 17 Apr 2010 10:24:00 GMT Economic indicators released in the week of April 19 - April 23, 2010. http://www.theoptionsinsider.com/Education/?id=4331 http://www.theoptionsinsider.com/Education/?id=4331 Fri, 16 Apr 2010 22:53:00 GMT Every time we sell a call option contract, we take upon ourselves the obligation to sell our long stock. So how can our OTM covered call allow us to have greater potential to hold onto our long stock for greater participation on a move upside than if we had sold an ATM call, while still being protected from not just some, but the majority of the downside risk? Trade a collar... http://www.theoptionsinsider.com/Education/?id=4323 http://www.theoptionsinsider.com/Education/?id=4323 Fri, 9 Apr 2010 10:28:00 GMT Economic Indicators being released for the week of April 12 - April 16 http://www.theoptionsinsider.com/Education/?id=4275 http://www.theoptionsinsider.com/Education/?id=4275 Tue, 6 Apr 2010 13:56:00 GMT Looking at the primal forces of price, time, and implied volatility. http://www.theoptionsinsider.com/Education/?id=4251 http://www.theoptionsinsider.com/Education/?id=4251 Sun, 4 Apr 2010 18:00:00 GMT A rundown of the U.S. economic indicators being released the week of April 5 through April 9. http://www.theoptionsinsider.com/Education/?id=4232 http://www.theoptionsinsider.com/Education/?id=4232 Thu, 1 Apr 2010 09:14:00 GMT Fundamentals. Without them, options traders don and t have a solid platform. Here and s your chance for a quick review... http://www.theoptionsinsider.com/Education/?id=4223 http://www.theoptionsinsider.com/Education/?id=4223 Sun, 28 Mar 2010 11:16:00 GMT A rundown of the U.S. economic indicators being released between March 29 and April 2 http://www.theoptionsinsider.com/Education/?id=4193 http://www.theoptionsinsider.com/Education/?id=4193 Fri, 26 Mar 2010 22:25:00 GMT In my most recent option class, I was asked to cover the topic of Covered Calls in greater detail than what is normally covered in the class presentation. As always, I pulled up an example thrown at me by my students and started studying the chart. The next step becomes an issue whether to enter into the trade at the same time (buying the stock and selling the call) or in two parts... http://www.theoptionsinsider.com/Education/?id=4184 http://www.theoptionsinsider.com/Education/?id=4184 Wed, 24 Mar 2010 13:04:00 GMT Seasonality, time decay, and other fun facts about premium sellers... http://www.theoptionsinsider.com/Education/?id=4167 http://www.theoptionsinsider.com/Education/?id=4167 Tue, 23 Mar 2010 09:04:00 GMT There is a whole winged class of mythical options families...let and s get started with an overview. http://www.theoptionsinsider.com/Education/?id=4155 http://www.theoptionsinsider.com/Education/?id=4155 Sun, 21 Mar 2010 10:01:00 GMT A rundown of the economic indicators being released between March 22 and March 26 http://www.theoptionsinsider.com/Education/?id=4141 http://www.theoptionsinsider.com/Education/?id=4141 Wed, 17 Mar 2010 13:57:00 GMT Because it is the fancifully named winged beast category that garners the most attention, I thought we could focus on the often overlooked members of the group: double calendars and double diagonals. http://www.theoptionsinsider.com/Education/?id=4118 http://www.theoptionsinsider.com/Education/?id=4118 Mon, 15 Mar 2010 09:45:00 GMT A look at the economic indicators released in the week beginning March 15, 2010 http://www.theoptionsinsider.com/Education/?id=4088 http://www.theoptionsinsider.com/Education/?id=4088 Wed, 10 Mar 2010 09:28:00 GMT An overview of naked calls http://www.theoptionsinsider.com/Education/?id=4059 http://www.theoptionsinsider.com/Education/?id=4059 Fri, 5 Mar 2010 14:08:00 GMT It may not be a word, but it and s central to understanding options http://www.theoptionsinsider.com/Education/?id=4032 http://www.theoptionsinsider.com/Education/?id=4032 Thu, 4 Mar 2010 10:25:00 GMT Bullish on your favorite stock? Selling naked puts might be a way to go... http://www.theoptionsinsider.com/Education/?id=4018 http://www.theoptionsinsider.com/Education/?id=4018 Thu, 25 Feb 2010 22:42:00 GMT The final segment in our three-part exploration of the butterfly spread. http://www.theoptionsinsider.com/Education/?id=3961 http://www.theoptionsinsider.com/Education/?id=3961 Thu, 18 Feb 2010 09:52:00 GMT Options add versatility to just about any investing idea http://www.theoptionsinsider.com/Education/?id=3919 http://www.theoptionsinsider.com/Education/?id=3919 Wed, 3 Feb 2010 00:03:00 GMT This is the final part of the Delta and Gamma series... http://www.theoptionsinsider.com/Education/?id=3842 http://www.theoptionsinsider.com/Education/?id=3842 Tue, 2 Feb 2010 18:00:00 GMT If it isn and 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 and t really "get gamma" unless you know delta. http://www.theoptionsinsider.com/Education/?id=3833 http://www.theoptionsinsider.com/Education/?id=3833 Mon, 1 Feb 2010 17:59:00 GMT Part one in a series looking at two of the fundamental Greeks in options trading. http://www.theoptionsinsider.com/Education/?id=3825 http://www.theoptionsinsider.com/Education/?id=3825 Thu, 28 Jan 2010 23:59:00 GMT 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. http://www.theoptionsinsider.com/Education/?id=3805 http://www.theoptionsinsider.com/Education/?id=3805 Wed, 27 Jan 2010 01:22:00 GMT 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 and rsquo;ve been in at least two decades. http://www.theoptionsinsider.com/Education/?id=3794 http://www.theoptionsinsider.com/Education/?id=3794 Thu, 21 Jan 2010 23:30:00 GMT 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. http://www.theoptionsinsider.com/Education/?id=3757 http://www.theoptionsinsider.com/Education/?id=3757 Thu, 14 Jan 2010 22:05:00 GMT 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. http://www.theoptionsinsider.com/Education/?id=3723 http://www.theoptionsinsider.com/Education/?id=3723 Wed, 13 Jan 2010 12:13:00 GMT 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. http://www.theoptionsinsider.com/Education/?id=3715 http://www.theoptionsinsider.com/Education/?id=3715 Tue, 5 Jan 2010 00:16:00 GMT Let us turn our attention towards Horizontals, which are also known as Time or Calendar spread trades. http://www.theoptionsinsider.com/Education/?id=3670 http://www.theoptionsinsider.com/Education/?id=3670 Wed, 30 Dec 2009 22:59:00 GMT 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. http://www.theoptionsinsider.com/Education/?id=3657 http://www.theoptionsinsider.com/Education/?id=3657 Mon, 28 Dec 2009 00:50:00 GMT 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. http://www.theoptionsinsider.com/Education/?id=3646 http://www.theoptionsinsider.com/Education/?id=3646 Mon, 7 Dec 2009 22:36:00 GMT 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... http://www.theoptionsinsider.com/Education/?id=3550 http://www.theoptionsinsider.com/Education/?id=3550 Wed, 2 Dec 2009 13:55:00 GMT We and 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 and 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... http://www.theoptionsinsider.com/Education/?id=3534 http://www.theoptionsinsider.com/Education/?id=3534 Mon, 30 Nov 2009 22:56:00 GMT 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... http://www.theoptionsinsider.com/Education/?id=3519 http://www.theoptionsinsider.com/Education/?id=3519 Wed, 18 Nov 2009 23:12:00 GMT 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. http://www.theoptionsinsider.com/Education/?id=3482 http://www.theoptionsinsider.com/Education/?id=3482 Wed, 11 Nov 2009 00:52:00 GMT Common Futures Market Misconceptions Explained and Clarified... http://www.theoptionsinsider.com/Education/?id=3446 http://www.theoptionsinsider.com/Education/?id=3446 Thu, 5 Nov 2009 00:33:00 GMT 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. http://www.theoptionsinsider.com/Education/?id=3411 http://www.theoptionsinsider.com/Education/?id=3411 Wed, 28 Oct 2009 22:34:00 GMT 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. http://www.theoptionsinsider.com/Education/?id=3358 http://www.theoptionsinsider.com/Education/?id=3358 Mon, 26 Oct 2009 00:31:00 GMT 7 Reasons That Retail Traders Should Consider Using Futures http://www.theoptionsinsider.com/Education/?id=3339 http://www.theoptionsinsider.com/Education/?id=3339 Tue, 20 Oct 2009 22:59:00 GMT As the title of the piece suggests, discipline indeed transcends trading. It and s what we eat (quantity and type of food), how we comport ourselves, and how we go about pursuing our goals. It and 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 and s just deluded thinking... http://www.theoptionsinsider.com/Education/?id=3300 http://www.theoptionsinsider.com/Education/?id=3300 Fri, 16 Oct 2009 23:13:00 GMT 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. http://www.theoptionsinsider.com/Education/?id=3278 http://www.theoptionsinsider.com/Education/?id=3278 Thu, 8 Oct 2009 21:47:00 GMT 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... http://www.theoptionsinsider.com/Education/?id=3220 http://www.theoptionsinsider.com/Education/?id=3220 Mon, 28 Sep 2009 23:43:00 GMT 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. http://www.theoptionsinsider.com/Education/?id=3147 http://www.theoptionsinsider.com/Education/?id=3147 Wed, 16 Sep 2009 23:14:00 GMT How to incorporate naked chart reading techniques into your options trading... http://www.theoptionsinsider.com/Education/?id=3071 http://www.theoptionsinsider.com/Education/?id=3071 Wed, 2 Sep 2009 23:07:00 GMT In many of my classes, as I go through various option strategies, a question frequently pops up about the married put. The majority of our students are unfamiliar with the intricacies of the married put. Here I am going to explain, in a simple and easily understandable way, what a married put is... http://www.theoptionsinsider.com/Education/?id=2985 http://www.theoptionsinsider.com/Education/?id=2985 Tue, 1 Sep 2009 00:00:00 GMT While scanning the Forex news recently, I noticed quite a few disturbing headlines regarding the proliferation of ponzi schemes in the Forex market... http://www.theoptionsinsider.com/Education/?id=2975 http://www.theoptionsinsider.com/Education/?id=2975 Wed, 26 Aug 2009 23:59:00 GMT In this episode, Mark is joined by Tom Busby, CEO, DTI Trader. Mark and Tom discuss the current outlook for the VIX in 2009. They also explore ways to use futures contracts to inform your options trading. http://www.theoptionsinsider.com/Education/?id=2942 http://www.theoptionsinsider.com/Education/?id=2942 Mon, 24 Aug 2009 23:55:00 GMT Exploring put-call parity on American exercise options... http://www.theoptionsinsider.com/Education/?id=2926 http://www.theoptionsinsider.com/Education/?id=2926 Fri, 21 Aug 2009 23:56:00 GMT Comparing synthetic calls and puts... http://www.theoptionsinsider.com/Education/?id=2919 http://www.theoptionsinsider.com/Education/?id=2919 Wed, 19 Aug 2009 00:55:00 GMT Exploring married puts vs. Long Calls, the impact of dividends on put/call parity and synthetics... http://www.theoptionsinsider.com/Education/?id=2905 http://www.theoptionsinsider.com/Education/?id=2905 Tue, 18 Aug 2009 23:15:00 GMT In order to understand more-complex spread strategies involving two or more options, it is essential to understand the arbitrage relationship of the put-call pair. Puts and calls of the same month and strike on the same underlying have prices that are defined in a mathematical relationship. http://www.theoptionsinsider.com/Education/?id=2897 http://www.theoptionsinsider.com/Education/?id=2897 Wed, 12 Aug 2009 00:26:00 GMT This week and s article will review some of the new regulations affecting retail Forex traders with accounts in the US that took effect in August, 2009. Includes how to use stops and limits after July 31st along with a discussion of FIFO and counter party risk. http://www.theoptionsinsider.com/Education/?id=2860 http://www.theoptionsinsider.com/Education/?id=2860 Wed, 29 Jul 2009 22:15:00 GMT Recently, I had lunch with a fellow Forex trader that I met several years ago. During our conversation, I asked him how his trading was going. His answer was "I am still working at getting consistent." I asked him if he had a written plan that included specific trading rules and strategies to accomplish this goal, and he said no. I strongly encouraged him to do this vital task before he took his next trade. I use a mechanical approach to my trading which includes specific rules for trading both a trending market, and a range bound market. My friend continues to look for the Holy Grail, one size fits all type of system that does not exist... http://www.theoptionsinsider.com/Education/?id=2770 http://www.theoptionsinsider.com/Education/?id=2770 Wed, 22 Jul 2009 00:14:00 GMT Successful short term Forex trading is the goal of many new traders who enter the Forex markets each year. For them, life begins and ends on the one or five minute chart. It is important to understand that the trend on a small time frame chart may only be a retracement of the primary trend from a higher time frame chart. As a result, understanding the higher time frame trend is an important step in becoming a successful, short term Forex trader. http://www.theoptionsinsider.com/Education/?id=2728 http://www.theoptionsinsider.com/Education/?id=2728 Tue, 21 Jul 2009 00:30:00 GMT Horizontal Spreads, also known as either Calendar Spreads or Time spreads, are currently one of my favorite strategies to trade. It is my humble belief that during this summer, the U.S. stock market isn and t going to do much of anything. The market might go a bit down and up but overall, at the end of the summer, it will seem as if it did not go anywhere significantly... http://www.theoptionsinsider.com/Education/?id=2720 http://www.theoptionsinsider.com/Education/?id=2720 Wed, 15 Jul 2009 23:48:00 GMT Short sellers tend to get a lot of bad press -- and a lot of blame when stocks go down. The alternative to shorting is to buy a put option. Buying a put allows you to lease the downward price movement of a stock... http://www.theoptionsinsider.com/Education/?id=2693 http://www.theoptionsinsider.com/Education/?id=2693 Tue, 14 Jul 2009 22:46:00 GMT Both of these are different ways for a trader to enter the markets they are trading that are trending higher. These entries can be used in any market, but certain types of entries will work better in the Forex markets due to the 24-hour trading session. Each type of entry has a set of rules including a method for entry, a first profit target, and a stop loss. Let and s examine both of these strategies and explain how and when to use them effectively when trading Forex from the long side... http://www.theoptionsinsider.com/Education/?id=2692 http://www.theoptionsinsider.com/Education/?id=2692 Mon, 13 Jul 2009 01:36:00 GMT FX Options can be tailored to meet your own FX market forecast while balancing between your investment goals and tolerance for risk. Some of the key beneits to trading FX Options include their limited risk, the ability to implement longer term strategies (relative to the short-term nature of the FX Spot market), as well as the multiple combinations of expiration months and strike prices... http://www.theoptionsinsider.com/Education/?id=2689 http://www.theoptionsinsider.com/Education/?id=2689 Fri, 10 Jul 2009 01:38:00 GMT In order to meet your financial goals in today and s environment, it and s imperative to consider all of the different asset classes, including cash, equities, bonds, options, natural resources, precious [[[meta]]]ls, real estate and foreign currencies. If you are actively managing your own finances, exchange-traded currency options are one of the most versatile trading instruments with strategies for forecasting and hedging to minimize your exposure to risk. http://www.theoptionsinsider.com/Education/?id=2679 http://www.theoptionsinsider.com/Education/?id=2679 Mon, 6 Jul 2009 00:54:00 GMT In my last article, I had utilized the Quarterly options for my Iron Condor trade and in this one, I will still stay on the topic of the Quarterlies. It is my humble conviction that the Quarterly options are under-utilized by option traders. The reason for my belief could be verified by looking at any of the open interest (O.I.) and volumes on the individual strike prices of either the calls or puts... http://www.theoptionsinsider.com/Education/?id=2648 http://www.theoptionsinsider.com/Education/?id=2648 Wed, 1 Jul 2009 23:30:00 GMT When I write my articles, I give my opinion about what I believe is happening to the currencies of the world based on the news I hear, the experts I follow, and my personal experiences of the economic cycles I have seen in the past. This fundamental information helps me understand what reports and indicators the economists of the world believe will shape future events. The charts provide me with the clues as to where the buyers and sellers are waiting to act in the future based on their actions in the past. The US Dollar Index (USDX) is the main currency chart I watch for clues as to the sentiment of the currency traders of the world, and for the places where battles have taken place in the past that may once again shape the future... http://www.theoptionsinsider.com/Education/?id=2629 http://www.theoptionsinsider.com/Education/?id=2629 Wed, 17 Jun 2009 00:52:00 GMT The only way to keep yourself out of trouble in the Forex market, and also profit from various market periods, is to know what trend the market is in and, most importantly, know what the next trend is going to be... http://www.theoptionsinsider.com/Education/?id=2536 http://www.theoptionsinsider.com/Education/?id=2536 Tue, 16 Jun 2009 23:16:00 GMT As we move through 2009, what can investors expect? How much uncertainty? When will the markets finally "shift" direction? Only time will tell. No market guru can predict with 100% certainty how the markets are going to perform over the next year. FX Options are available each trading day for retail investors, institutions and market makers. As an investor, it and rsquo;s important to carefully monitor the risk and reward relationship on a daily basis to ind the appropriate trades for your portfolios. http://www.theoptionsinsider.com/Education/?id=2526 http://www.theoptionsinsider.com/Education/?id=2526 Mon, 15 Jun 2009 01:18:00 GMT The financial markets are constantly looking ahead for information to price themselves. With the recent dramatic upheavals in the fnancial markets, hope has been replaced by despair. The markets generally experience four price stages in their own "life cycle": consolidation, breakout, equilibrium, and the reversal of the previous breakout. The challenge for investors is not only qualifying which stage the market is in, but also the various sub-stages it encounters... http://www.theoptionsinsider.com/Education/?id=2516 http://www.theoptionsinsider.com/Education/?id=2516 Fri, 12 Jun 2009 23:44:00 GMT In this article I argue that naked put selling, when the volatility is at extreme levels, would provide the seller with a "juicy" premium. At the same time the exposure would be technically unlimited (though the price could only go down to zero) while the reward would be limited to the premium received. Nonetheless, the safer way of trading would be by using spread trading or the simultaneous selling and buying of option premium. http://www.theoptionsinsider.com/Education/?id=2506 http://www.theoptionsinsider.com/Education/?id=2506 Fri, 8 May 2009 23:42:00 GMT New rules are about to go into effect in the Forex market. How will these changes affect you? http://www.theoptionsinsider.com/Education/?id=2280 http://www.theoptionsinsider.com/Education/?id=2280 Wed, 6 May 2009 22:53:00 GMT Continuing our analysis of a reader and s Bull Put trade. What went right and what went wrong? Read on to find out... http://www.theoptionsinsider.com/Education/?id=2259 http://www.theoptionsinsider.com/Education/?id=2259 Tue, 5 May 2009 01:16:00 GMT Examining what went wright, and what went wrong, in a reader and s bull put trade. http://www.theoptionsinsider.com/Education/?id=2251 http://www.theoptionsinsider.com/Education/?id=2251 Wed, 29 Apr 2009 22:39:00 GMT This article is named Plan the Exit(s) Beforehand for the simple reason that there should always be more than one possible exit strategy for every single option trade that we make. Since the stock market on any given day could move in three possible directions (up, down, or sideways), we must have multiple exit strategies for our option trades... http://www.theoptionsinsider.com/Education/?id=2219 http://www.theoptionsinsider.com/Education/?id=2219 Tue, 28 Apr 2009 22:39:00 GMT We haven and t discussed carry trades in quite a while, but this strategy may be coming back into vogue. Many assume that carry trades must include a short position in the Japanese Yen, but this is not the case; any currency that possesses low interest rates becomes a viable shorting candidate for this trading strategy... http://www.theoptionsinsider.com/Education/?id=2207 http://www.theoptionsinsider.com/Education/?id=2207 Thu, 23 Apr 2009 23:23:00 GMT Options vertical spread strategies can help to mitigate any volatility risk. In this current high implied volatility environment, vertical spread strategies are great for entering new FX options positions... http://www.theoptionsinsider.com/Education/?id=2189 http://www.theoptionsinsider.com/Education/?id=2189 Wed, 22 Apr 2009 00:03:00 GMT FX Options, just like other exchange-traded options, gives investors financial control of an asset, but with limited risk. Investors can purchase calls (the right to buy the US dollar exchange rate), or puts (the right to sell the US dollar exchange rate) based on their views of the markets, creating a limited risk profile. Sellers can earn premiums, but with substantial (theoretically even unlimited) risk. If investors expected large potential moves in the FX marketplace, buying calls or puts might make sense. http://www.theoptionsinsider.com/Education/?id=2182 http://www.theoptionsinsider.com/Education/?id=2182 Tue, 21 Apr 2009 01:17:00 GMT With the ever-quickening pace of globalization, the popularity of exchange-listed foreign exchange options has only increased as investors seek more transparency and flexibility in their trading. FX Options provide investors with more choices. How can you decide which FX options strategy is appropriate for you? http://www.theoptionsinsider.com/Education/?id=2174 http://www.theoptionsinsider.com/Education/?id=2174 Mon, 20 Apr 2009 22:59:00 GMT The goal of this article is to point out that it is of utmost importance to be familiar with the product on which we are trading options. At any given time we should be aware of many factors which come into play when trading options, such as earning releases, dividends, implied volatility, and also technical analysis which determines the proper timing for both entries and exits. http://www.theoptionsinsider.com/Education/?id=2165 http://www.theoptionsinsider.com/Education/?id=2165 Fri, 17 Apr 2009 23:05:00 GMT Exploring Forex commissions, the different types of Forex accounts and the actual dollar value of a "pip." http://www.theoptionsinsider.com/Education/?id=2158 http://www.theoptionsinsider.com/Education/?id=2158 Thu, 9 Apr 2009 01:43:00 GMT In this episode, Mark sits down with Craig Weil, Director of Trading at Online Trading Academy Chicago and the host of Traders Talk Live. Mark and Craig discuss the difficulties many traders encounter when switching to a new product class. They also discuss Craig and s 35 years of pit trading experience and the perils of trading everything from equity options to cattle futures. Finally, they explain how to avoid the numerous hucksters and con artists lurking in the world of financial education. http://www.theoptionsinsider.com/Education/?id=2122 http://www.theoptionsinsider.com/Education/?id=2122 Tue, 31 Mar 2009 21:37:00 GMT After my article, Bear Call Gone Bad, I have received several emails requesting the trade fix. The aim of this article is to examine at least one of these possibilities. Again, I am not recommending anything but only explaining the mathematical side of this "fix," and it involves a two step procedure. .. http://www.theoptionsinsider.com/Education/?id=2065 http://www.theoptionsinsider.com/Education/?id=2065 Mon, 30 Mar 2009 23:14:00 GMT After my article, Bear Call Gone Bad, I have received several emails requesting the trade fix. The aim of this article is to examine at least one of these possibilities. Again, I am not recommending anything but only explaining the mathematical side of this "fix," and it involves a two step procedure. http://www.theoptionsinsider.com/Education/?id=2056 http://www.theoptionsinsider.com/Education/?id=2056 Wed, 25 Mar 2009 00:34:00 GMT Quantitative easing may sound complicated, but it and s really very simple. Also, why does the British Pound continue to slide? http://www.theoptionsinsider.com/Education/?id=2033 http://www.theoptionsinsider.com/Education/?id=2033 Tue, 24 Mar 2009 00:32:00 GMT In this article, I will go over three possible outcomes for a Bear Call spread at expiry. Those scenarios involve the price of the underlying closing within the spread, above the sold call, and below the sold call.... http://www.theoptionsinsider.com/Education/?id=2025 http://www.theoptionsinsider.com/Education/?id=2025 Fri, 20 Mar 2009 23:02:00 GMT What is the recommended stop-loss size for trading long-term currency pairs? http://www.theoptionsinsider.com/Education/?id=2011 http://www.theoptionsinsider.com/Education/?id=2011 Tue, 17 Mar 2009 00:35:00 GMT Continuing our examination of Iron Condor strategies in Potash Corp. (POT)... http://www.theoptionsinsider.com/Education/?id=1990 http://www.theoptionsinsider.com/Education/?id=1990 Mon, 16 Mar 2009 00:42:00 GMT Analyzing an Iron Condor trade in Potash Corp. (POT)... http://www.theoptionsinsider.com/Education/?id=1982 http://www.theoptionsinsider.com/Education/?id=1982 Thu, 5 Mar 2009 23:12:00 GMT Time for a reality check on your options trading... http://www.theoptionsinsider.com/Education/?id=1933 http://www.theoptionsinsider.com/Education/?id=1933 Wed, 4 Mar 2009 22:42:00 GMT Your goal as an options trader is to move the odds in your favor wherever possible to ensure the success of your trades. Everyone likes to talk about their successes, but it and s really the mistakes that teach us the most... http://www.theoptionsinsider.com/Education/?id=1926 http://www.theoptionsinsider.com/Education/?id=1926 Mon, 2 Mar 2009 00:20:00 GMT Exploring the correlation between the GBP/JPY and EUR/JPY currency pairs and the S and P 500. http://www.theoptionsinsider.com/Education/?id=1912 http://www.theoptionsinsider.com/Education/?id=1912 Fri, 27 Feb 2009 01:29:00 GMT Option pricing can be downright maddening. You may own a call on a stock that goes up one day, but your call loses value. Honestly, it and s not that uncommon.... http://www.theoptionsinsider.com/Education/?id=1909 http://www.theoptionsinsider.com/Education/?id=1909 Mon, 23 Feb 2009 02:20:00 GMT Is Forex Trading A Zero-Sum Game? Also, more on Forex micro accounts. http://www.theoptionsinsider.com/Education/?id=1881 http://www.theoptionsinsider.com/Education/?id=1881 Fri, 13 Feb 2009 21:53:00 GMT How to trade in Forex micro accounts. Micro accounts just became popular last year, and many traders aren and rsquo;t even aware that they exist. This is a big deal because it means you can sustain larger draw downs without risking large sums of money; in other words, your style of trading does not have be dictated by the size of your account. http://www.theoptionsinsider.com/Education/?id=1845 http://www.theoptionsinsider.com/Education/?id=1845 Thu, 12 Feb 2009 22:10:00 GMT In Tough Times, Many Options Traders Go Back To Basics... http://www.theoptionsinsider.com/Education/?id=1838 http://www.theoptionsinsider.com/Education/?id=1838 Wed, 11 Feb 2009 20:41:00 GMT In Tough Times, Many Options Traders Go Back To Basics... http://www.theoptionsinsider.com/Education/?id=1834 http://www.theoptionsinsider.com/Education/?id=1834 Thu, 29 Jan 2009 22:28:00 GMT Exploring how to combine options strategies... http://www.theoptionsinsider.com/Education/?id=1779 http://www.theoptionsinsider.com/Education/?id=1779 Thu, 29 Jan 2009 22:12:00 GMT The short-selling of stocks has achieved almost-mythical status among individual investors. We hear, all the time -- on CNBC, FOX or from brokers or financial gurus -- that "The shorts did it," "They are caught in a short-squeeze," "The shorts are bringing it down." Mention the word "short" and you can almost hear Darth Vader breathing through his mask. But all myths are based on some facts, so let and s look at them... http://www.theoptionsinsider.com/Education/?id=1782 http://www.theoptionsinsider.com/Education/?id=1782 Wed, 28 Jan 2009 22:29:00 GMT Exploring how to combine options strategies... http://www.theoptionsinsider.com/Education/?id=1773 http://www.theoptionsinsider.com/Education/?id=1773 Thu, 22 Jan 2009 20:31:00 GMT In my previous article, I.C. Explained, I described a textbook example of an Iron Condor. In this article, I will pick up where I left off, and focus on defining the main difference between the I.C. (Iron Condor) and Condor Spreads... http://www.theoptionsinsider.com/Education/?id=1744 http://www.theoptionsinsider.com/Education/?id=1744 Wed, 21 Jan 2009 22:22:00 GMT In this week and s article, I will go over one of my Iron Condors that I did awhile ago. (Honestly, in my humble opinion, the last part of 2008 was not the correct environment for the Iron Condor strategy. The I.C. is a strategy that works well in sideways markets. In the last half of 2008, we had a "trending" market, and every owner of a 401K or an IRA account knows which direction the equity market was trending: a way South – deep South.) Let us define an I.C. as a complex spread trade used in the directionless market environment. More specifically, an I.C. is an option strategy composed of two vertical credit spreads, namely a Bear Call and a Bull Put. http://www.theoptionsinsider.com/Education/?id=1737 http://www.theoptionsinsider.com/Education/?id=1737 Wed, 14 Jan 2009 02:46:00 GMT In this article we will examine a specific case of a debit and a credit spread in order to point out that there is virtually very little difference between the two. Instead of attempting to explain the concept by using a fictitious example, the stock XYZ with the one strike price being at this level and the other one at that level, etc, we shall utilize a couple of my recent trades for the same purpose... http://www.theoptionsinsider.com/Education/?id=1712 http://www.theoptionsinsider.com/Education/?id=1712 Tue, 13 Jan 2009 02:29:00 GMT In this article we will examine a specific case of a debit and a credit spread in order to point out that there is virtually very little difference between the two. Instead of attempting to explain the concept by using a fictitious example, the stock XYZ with the one strike price being at this level and the other one at that level, etc, we shall utilize a couple of my recent trades for the same purpose... http://www.theoptionsinsider.com/Education/?id=1706 http://www.theoptionsinsider.com/Education/?id=1706 Tue, 6 Jan 2009 00:56:00 GMT A brief overview of the Forex market along with an overview of the advantages of Forex trading... http://www.theoptionsinsider.com/Education/?id=1674 http://www.theoptionsinsider.com/Education/?id=1674 Sun, 4 Jan 2009 22:55:00 GMT For an options trader, one of the most remarkable aspects of the 2008 financial crisis was that it featured months in which many options closed in or near the money when, even weeks before, they were deep out-of-the-money (DOTM) and "worthless." The lesson is that ostensibly overpriced options are totally devoid of value, until they aren and t... http://www.theoptionsinsider.com/Education/?id=3667 http://www.theoptionsinsider.com/Education/?id=3667 Fri, 2 Jan 2009 03:34:00 GMT I and ve often heard some investor-traders refer to technical analysis as "voodoo." Granted, there and s a lot of so-called "indicators" out there that are more than a little mysterious and subjective, from Gann lines to planetary alignments. And some of their proponents are in their own galaxies as well. Now, even many of my option trader buddies who do volatility arbitrage are TA cynics. But, what I have to remind them of is that looking at volatility charts is a form of "technical analysis" just like looking at moving averages of price. They are both based on historical statistics, plotted on a graph in a given time frame. They hate when I tell them that, because they think that statistical vol arb is somehow more pure than "voodoo" statistical price analysis. http://www.theoptionsinsider.com/Education/?id=1664 http://www.theoptionsinsider.com/Education/?id=1664 Wed, 31 Dec 2008 00:06:00 GMT Writing credit call spreads can be the key to victory in the battle for market domination... http://www.theoptionsinsider.com/Education/?id=1663 http://www.theoptionsinsider.com/Education/?id=1663 Tue, 30 Dec 2008 01:10:00 GMT Writing credit call spreads can be the key to victory in the battle for market domination... http://www.theoptionsinsider.com/Education/?id=1658 http://www.theoptionsinsider.com/Education/?id=1658 Wed, 24 Dec 2008 02:27:00 GMT In light of the insane volatility in the markets recently, I thought this week it might be helpful to cover a potential strategy on very volatile stocks: Upside-Down Split-Strikes http://www.theoptionsinsider.com/Education/?id=1652 http://www.theoptionsinsider.com/Education/?id=1652 Tue, 23 Dec 2008 02:22:00 GMT In this article, we and ll examine the similarities and differences between the spot forex and forex futures markets... http://www.theoptionsinsider.com/Education/?id=1646 http://www.theoptionsinsider.com/Education/?id=1646 Mon, 22 Dec 2008 02:22:00 GMT In this article, we and ll examine the similarities and differences between the spot forex and forex futures markets... http://www.theoptionsinsider.com/Education/?id=1640 http://www.theoptionsinsider.com/Education/?id=1640 Wed, 17 Dec 2008 16:55:00 GMT The FED lowering it and s effective Fed Funds target rate to between 25 bp and zero, and it and s sweeping new debt purchase program, sent the euro up by 3-cents in 90 minutes, from roughly $1.38 to over $1.41. In this article we and ll look at the EUR/USD pair as well as how to convert forex volatility for your trading range... http://www.theoptionsinsider.com/Education/?id=1626 http://www.theoptionsinsider.com/Education/?id=1626 Mon, 15 Dec 2008 23:24:00 GMT In this article, we and ll explore a strategy where we not only expect options prices to drop to zero, but we strive for it and position ourselves to take advantage of it with option credit spreads. Why? Because someone else and s loss becomes our gain! http://www.theoptionsinsider.com/Education/?id=1608 http://www.theoptionsinsider.com/Education/?id=1608 Tue, 2 Dec 2008 23:56:00 GMT Stock splits can happen for a variety of reasons, but even if you and re only trading the options, you and re still impacted by any changes that happen in the underlying shares. There and s no reason to panic, and there and s nothing you need to do. But when companies attract big-money investors and share prices start soaring, it and s good to know what could be on the horizon for some of your investments. http://www.theoptionsinsider.com/Education/?id=1561 http://www.theoptionsinsider.com/Education/?id=1561 Mon, 1 Dec 2008 00:17:00 GMT Fib strategies have become very popular in forex trading. But today there are so many permutations and variations on this basic theme that sometimes the useful aspects of this technique get lost in the shuffle. This question opened the door for what we might call the "Great Fibonacci Debate". Read on... http://www.theoptionsinsider.com/Education/?id=1554 http://www.theoptionsinsider.com/Education/?id=1554 Mon, 24 Nov 2008 13:37:00 GMT A typical calendar spread is the sale of a shorter-term option and the purchase of a longer-term one. These spreads often offer the average investor the chance to sell overpriced short-term premium with relatively little risk. We and ll kick things off by looking at a simple long at-the-money calendar spread... http://www.theoptionsinsider.com/Education/?id=1530 http://www.theoptionsinsider.com/Education/?id=1530 Mon, 24 Nov 2008 13:34:00 GMT A typical calendar spread is the sale of a shorter-term option and the purchase of a longer-term one. These spreads often offer the average investor the chance to sell overpriced short-term premium with relatively little risk. We and ll kick things off by looking at a simple long at-the-money calendar spread... http://www.theoptionsinsider.com/Education/?id=1533 http://www.theoptionsinsider.com/Education/?id=1533 Fri, 14 Nov 2008 01:28:00 GMT This week I want to talk about the early exercise of options. In order for it to make sense to early exercise an option, there must be some positive cash flow that results from the exercise. We and ll look at calls and puts separately to determine when the early exercise is the right way to go. http://www.theoptionsinsider.com/Education/?id=1494 http://www.theoptionsinsider.com/Education/?id=1494 Wed, 12 Nov 2008 00:27:00 GMT Since we are in the midst of a credit crisis, our chosen indicator for gauging fear in the current environment is the Ted Spread. Another famous "fear gauge", the CBOE and s Volatility Index (VIX), is currently reflecting a slightly more relaxed environment. In this article, we chart the surprising similarities between the VIX and the Ted Spread. http://www.theoptionsinsider.com/Education/?id=1483 http://www.theoptionsinsider.com/Education/?id=1483 Thu, 30 Oct 2008 00:18:00 GMT Because Forex is relatively new to the retail trading public, scammers who make unrealistic promises are becoming a constant nuisance. Here and s a good rule of thumb, and it doesn and t matter if you and re trading stocks, futures, options, or Forex – If anyone promises outlandish returns, don and t believe it; it and s probably a scam. http://www.theoptionsinsider.com/Education/?id=1426 http://www.theoptionsinsider.com/Education/?id=1426 Wed, 29 Oct 2008 00:47:00 GMT Examining spread margin and the impact of portfolio margin on your trading account... http://www.theoptionsinsider.com/Education/?id=1423 http://www.theoptionsinsider.com/Education/?id=1423 Tue, 28 Oct 2008 22:52:00 GMT Breaking down the margin calculations for short option positions allows you to determine how many options you can sell. http://www.theoptionsinsider.com/Education/?id=1416 http://www.theoptionsinsider.com/Education/?id=1416 Mon, 27 Oct 2008 22:57:00 GMT With the "diagonal backspread," you buy longer-term options and sell a lesser number of nearer-term options that are more in-the-money. Diagonal backspread opportunities often exist in volatile, relatively high premium markets, such as we have been experiencing. With the call diagonal backspread, you can take advantage of the fact that in nervous markets, the nearer-term lower-strike options become steeply overpriced, while the longer-term higher-strike options tend to remain fairly priced. http://www.theoptionsinsider.com/Education/?id=1409 http://www.theoptionsinsider.com/Education/?id=1409 Fri, 24 Oct 2008 00:27:00 GMT Exploring the difference between equity and index multipliers, settlement values, exercise and more... http://www.theoptionsinsider.com/Education/?id=1403 http://www.theoptionsinsider.com/Education/?id=1403 Mon, 20 Oct 2008 23:32:00 GMT Okay, so things are rough out there. But just because the world is facing financial Armageddon, and long-term investments are falling apart faster than the New York Mets in September, that doesn and t mean your trading account has to suffer. In fact, some traders thrive in this rock and em, sock and em environment. Just take a look at the volatility in the Great Britain Pound – U.S. Dollar currency pair (symbol GBP/USD)... http://www.theoptionsinsider.com/Education/?id=1377 http://www.theoptionsinsider.com/Education/?id=1377 Tue, 14 Oct 2008 00:05:00 GMT What Is The TED Spread and Why Is It At The Highest Level Since 1987? http://www.theoptionsinsider.com/Education/?id=1352 http://www.theoptionsinsider.com/Education/?id=1352 Mon, 13 Oct 2008 01:00:00 GMT Currency volatility is at its highest point since the year 2000, as the markets swing wildly while absorbing bad news of historic proportions. The head spinning moves we and ve seen recently have driven the Average True Range, also known as ATR, of the major currency pairs to levels that are rarely reached. In this article, we will explore the basic mechanics of ATR and explain why it is so important to forex traders. http://www.theoptionsinsider.com/Education/?id=1346 http://www.theoptionsinsider.com/Education/?id=1346 Fri, 10 Oct 2008 00:11:00 GMT Traders Talk Live Radio (which airs on AM 560 WIND in Chicago) recently featured www.TheOptionsInsider.com founder Mark S. Longo as a special guest. Mark discussed the impact of the short selling ban on the options market as well as a few protective options strategies for these troubled times. Options Insider Radio listeners can find the complete broadcast here... http://www.theoptionsinsider.com/Education/?id=1340 http://www.theoptionsinsider.com/Education/?id=1340 Thu, 2 Oct 2008 00:28:00 GMT Exploring the impact of the short selling ban on put/call parity, bid/ask spreads and options pricing models. http://www.theoptionsinsider.com/Education/?id=1305 http://www.theoptionsinsider.com/Education/?id=1305 Thu, 11 Sep 2008 23:21:00 GMT We explore the truth behind the common phrase "triple witching hour." We also explore why options expire on the third Friday of the month and what happens when Holidays disturb the expiration calendar. Finally, we examine ways to predict when your short option positions will be assigned. http://www.theoptionsinsider.com/Education/?id=1203 http://www.theoptionsinsider.com/Education/?id=1203 Mon, 25 Aug 2008 01:32:00 GMT A number of readers and students have asked me to explain in detail how some of the volatility calculations are made. This week, I and ll go through the steps of calculating historical volatility.. http://www.theoptionsinsider.com/Education/?id=1128 http://www.theoptionsinsider.com/Education/?id=1128 Wed, 20 Aug 2008 23:41:00 GMT Examining "The Greeks" and P and L Graphs of the Incredible Ratio Spread... http://www.theoptionsinsider.com/Education/?id=1112 http://www.theoptionsinsider.com/Education/?id=1112 Tue, 19 Aug 2008 14:16:00 GMT Last week I discussed one of my favorite types of trades, the Backspread. This week, I and m going to talk about the other side of that trade, the Ratio Vertical Spread... http://www.theoptionsinsider.com/Education/?id=1104 http://www.theoptionsinsider.com/Education/?id=1104 Tue, 29 Jul 2008 00:16:00 GMT How to trade diagonal spreads with puts and how to use diagonal spreads as alternatives to covered calls... http://www.theoptionsinsider.com/Education/?id=1006 http://www.theoptionsinsider.com/Education/?id=1006 Mon, 28 Jul 2008 00:18:00 GMT You create a diagonal spread when you buy and write options (calls or puts, but not both in the same spread) on the same stock with different strike prices and different expirations. As we will show in the examples in this article, diagonal spreads can be used as capital efficient covered call alternatives... http://www.theoptionsinsider.com/Education/?id=997 http://www.theoptionsinsider.com/Education/?id=997 Wed, 16 Jul 2008 00:09:00 GMT We explore examples of how to construct vertical option spreads... http://www.theoptionsinsider.com/Education/?id=950 http://www.theoptionsinsider.com/Education/?id=950 Tue, 15 Jul 2008 00:18:00 GMT 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... http://www.theoptionsinsider.com/Education/?id=942 http://www.theoptionsinsider.com/Education/?id=942 Wed, 9 Jul 2008 23:10:00 GMT In an earlier article, we showed you how you can hedge your stock with "collars," (combinations of covered calls and protective puts). This week, we show how you can hedge your equity portfolio with a bear option spread. This particular hedge is attractive in times such as these when the demand for nominally cheap insurance is driving up the price of the lower strike puts. http://www.theoptionsinsider.com/Education/?id=925 http://www.theoptionsinsider.com/Education/?id=925 Tue, 8 Jul 2008 00:15:00 GMT 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... http://www.theoptionsinsider.com/Education/?id=916 http://www.theoptionsinsider.com/Education/?id=916 Mon, 7 Jul 2008 00:17:00 GMT 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 and s true, but I don and t where I heard it." Well, today I and m going to clear up some of those issues... http://www.theoptionsinsider.com/Education/?id=912 http://www.theoptionsinsider.com/Education/?id=912 Thu, 5 Jun 2008 21:00:00 GMT Examining the impact of theta and vega on strangles... http://www.theoptionsinsider.com/Education/?id=841 http://www.theoptionsinsider.com/Education/?id=841 Tue, 3 Jun 2008 09:16:00 GMT Let and s examine the characteristics of this killer trade in terms of the greeks... http://www.theoptionsinsider.com/Education/?id=833 http://www.theoptionsinsider.com/Education/?id=833 Mon, 2 Jun 2008 09:18:00 GMT Today we are going to learn about the straddle and s first cousin, the strangle... http://www.theoptionsinsider.com/Education/?id=831 http://www.theoptionsinsider.com/Education/?id=831 Thu, 29 May 2008 23:28:00 GMT More answers to common options questions including: What Are The Advantages/Disadvantages Of Vertical Spreads and What Is The Risk Of Selling An Out-Of-The-Money Covered Call? http://www.theoptionsinsider.com/Education/?id=824 http://www.theoptionsinsider.com/Education/?id=824 Wed, 28 May 2008 09:35:00 GMT More answers to common options questions including: What are the similarities/differences between futures and options contracts and How do LEAPS differ from conventional options? http://www.theoptionsinsider.com/Education/?id=820 http://www.theoptionsinsider.com/Education/?id=820 Tue, 27 May 2008 09:47:00 GMT More answers to common options questions including: How do I find an options broker, What is an options exchange And How do I get started trading options? http://www.theoptionsinsider.com/Education/?id=817 http://www.theoptionsinsider.com/Education/?id=817 Thu, 22 May 2008 09:20:00 GMT More answers to common options questions including: Can I trade options in my IRA? How do ESOPS differ from standard options? What is the difference between American-style and European-style options? And more... http://www.theoptionsinsider.com/Education/?id=811 http://www.theoptionsinsider.com/Education/?id=811 Tue, 20 May 2008 09:35:00 GMT More answers to common options questions including: "What Is Liquidity and "What Do "Buy to Open" And "Sell To Close" Mean? http://www.theoptionsinsider.com/Education/?id=805 http://www.theoptionsinsider.com/Education/?id=805 Mon, 12 May 2008 11:53:00 GMT Can Options Be Traded On Any Listed Stock? Is Increased Open Interest Bullish? How Is Open Interest Calculated? http://www.theoptionsinsider.com/Education/?id=782 http://www.theoptionsinsider.com/Education/?id=782 Fri, 9 May 2008 12:25:00 GMT Taking another look at Theta, Vega and Rho http://www.theoptionsinsider.com/Education/?id=779 http://www.theoptionsinsider.com/Education/?id=779 Thu, 8 May 2008 12:30:00 GMT Gamma: How Quickly the Odds Change... http://www.theoptionsinsider.com/Education/?id=777 http://www.theoptionsinsider.com/Education/?id=777 Wed, 7 May 2008 12:42:00 GMT Delta, Gamma, Theta, Vega and Rho - you are likely to hear these "Greek" risk measures whenever traders talk about options. Although these terms sound complicated, they actually are easy to understand once you grasp a few basic concepts. Mastering them will give you a good understanding of why options behave the way they do under different circumstances. http://www.theoptionsinsider.com/Education/?id=771 http://www.theoptionsinsider.com/Education/?id=771 Thu, 1 May 2008 12:52:00 GMT "Fine," you might say "that and s the theory, but is it the way options really trade?" The answer is "yes." The reason is that when call or put time premiums get out of line with each other, option market makers can make a risk-free arbitrage profit. http://www.theoptionsinsider.com/Education/?id=764 http://www.theoptionsinsider.com/Education/?id=764 Wed, 30 Apr 2008 13:58:00 GMT This week, we review what are known as the put/call parity rules. If you know one rule - and you remember your high school algebra - you can quickly master all the rules. Mastery of these rules gives you a lot more flexibility when planning your options strategies. http://www.theoptionsinsider.com/Education/?id=760 http://www.theoptionsinsider.com/Education/?id=760 Thu, 24 Apr 2008 14:15:00 GMT When you create bull put spread that is based on one of our "naked" put writing recommendations, you need to select a put that is reasonably close-to-the-money. You then need to find a put of the same expiration with a strike price that is both lower and further from the stock price than the recommended short put.. http://www.theoptionsinsider.com/Education/?id=745 http://www.theoptionsinsider.com/Education/?id=745 Tue, 22 Apr 2008 09:30:00 GMT Writing "naked" options can be highly profitable, but it also can be very risky, since losses can easily exceed the margin that you originally posted. In this report, we show you how, in many cases, you can substitute a credit spread for an uncovered (or "naked") write. Because credit spreads have limited losses, their margins are often a lot lower than the margins on naked writes. At the same time, these spreads can still offer very substantial returns on capital. http://www.theoptionsinsider.com/Education/?id=740 http://www.theoptionsinsider.com/Education/?id=740 Thu, 17 Apr 2008 09:45:00 GMT This report is part of an ongoing series on option spreads. Spreads are combinations of different option positions on the same stock. Spreads are really not that complicated once you understand a few basic principals. The spreads that we will cover in this series will all have limited risk. Some of them can offer investors very efficient use of their capital. http://www.theoptionsinsider.com/Education/?id=730 http://www.theoptionsinsider.com/Education/?id=730 Tue, 15 Apr 2008 09:56:00 GMT This report is part of an ongoing series on option spreads. Spreads are combinations of different option positions on the same stock. Spreads are really not that complicated once you understand a few basic principals. The spreads that we will cover in this series will all have limited risk. Some of them can offer investors very efficient use of their capital. http://www.theoptionsinsider.com/Education/?id=724 http://www.theoptionsinsider.com/Education/?id=724 Mon, 14 Apr 2008 10:09:00 GMT This report is part of an ongoing series on option spreads. Spreads are combinations of different option positions on the same stock. Spreads are really not that complicated once you understand a few basic principals. The spreads that we will cover in this series will all have limited risk. Some of them can offer investors very efficient use of their capital. http://www.theoptionsinsider.com/Education/?id=721 http://www.theoptionsinsider.com/Education/?id=721 Tue, 8 Apr 2008 10:48:00 GMT Because the net time premiums of calls and puts with the same stock, strike and expiration can be very close, it often happens that if we are recommending a particular call for covered writing, we are also recommending the corresponding put for "naked" put writing as well... http://www.theoptionsinsider.com/Education/?id=709 http://www.theoptionsinsider.com/Education/?id=709 Mon, 7 Apr 2008 10:56:00 GMT When you write a put on a particular stock with a certain strike and expiration, you have a position that has very similar gain and loss potential as a covered call on that same stock with the same strike and expiration. http://www.theoptionsinsider.com/Education/?id=703 http://www.theoptionsinsider.com/Education/?id=703 Mon, 17 Mar 2008 12:06:00 GMT Buying at-the-money and out-of-the-money puts... http://www.theoptionsinsider.com/Education/?id=659 http://www.theoptionsinsider.com/Education/?id=659 Thu, 13 Mar 2008 12:08:00 GMT No matter how bullish the stock market may look at a particular time, you should always diversify your portfolio with a few uncovered (or "naked") put purchases. This week, we offer advice on how to pick the puts that are right for you. http://www.theoptionsinsider.com/Education/?id=654 http://www.theoptionsinsider.com/Education/?id=654 Thu, 14 Feb 2008 14:04:00 GMT Examples of index option closing transactions and settlement. http://www.theoptionsinsider.com/Education/?id=594 http://www.theoptionsinsider.com/Education/?id=594 Mon, 11 Feb 2008 14:07:00 GMT Examining Index Option Exercise and Assignment Along With The Confusion Over AM/PM Settlement... http://www.theoptionsinsider.com/Education/?id=584 http://www.theoptionsinsider.com/Education/?id=584 Fri, 8 Feb 2008 14:08:00 GMT The nuts and bolts of index options. http://www.theoptionsinsider.com/Education/?id=580 http://www.theoptionsinsider.com/Education/?id=580 Thu, 7 Feb 2008 14:09:00 GMT An examination of index option pricing, volatility and risk along with a comparison of equity vs. index options. http://www.theoptionsinsider.com/Education/?id=577 http://www.theoptionsinsider.com/Education/?id=577 Wed, 6 Feb 2008 14:10:00 GMT Before you can start trading index options you have to master the underlying. http://www.theoptionsinsider.com/Education/?id=573 http://www.theoptionsinsider.com/Education/?id=573 Tue, 5 Feb 2008 14:12:00 GMT Like equity options, index options offer the investor an opportunity to either capitalize on an expected market move or to protect holdings in the underlying instruments. The difference is that the underlying instruments are indexes. These indexes can reflect the characteristics of either the broad equity market as a whole or specific industry sectors within the marketplace. http://www.theoptionsinsider.com/Education/?id=569 http://www.theoptionsinsider.com/Education/?id=569 Mon, 4 Feb 2008 21:26:00 GMT In this article, I will give an example of placing two different types of bearish strategies with two different expiration months on the same underlying. Once again I am advocating for being a Net Premium Seller... http://www.theoptionsinsider.com/Education/?id=1803 http://www.theoptionsinsider.com/Education/?id=1803 Sat, 2 Feb 2008 00:39:00 GMT I suppose everybody has heard the above, somewhat modified, quote in a wide variety of contexts. Well, it and s no different in options trading! People are trained to look at data in a wide variety of ways. Some feel comfortable looking at a column of numbers, others like charts, and still others like to look at different types of graphs. Our plan is to look at graphical representations of the 6 building blocks of options trading and then later on we and ll learn how to combine these graphs into some common and uncommon options positions. These graphs will allow us to glean a lot of information about our positions, just by looking. http://www.theoptionsinsider.com/Education/?id=1789 http://www.theoptionsinsider.com/Education/?id=1789 Wed, 19 Dec 2007 09:48:00 GMT Covered call strategies using LEAPS. http://www.theoptionsinsider.com/Education/?id=500 http://www.theoptionsinsider.com/Education/?id=500 Tue, 18 Dec 2007 09:51:00 GMT Put strategies using LEAPS. http://www.theoptionsinsider.com/Education/?id=498 http://www.theoptionsinsider.com/Education/?id=498 Thu, 13 Dec 2007 09:52:00 GMT A look at LEAPS trading strategies... http://www.theoptionsinsider.com/Education/?id=494 http://www.theoptionsinsider.com/Education/?id=494 Wed, 12 Dec 2007 09:54:00 GMT Understanding LEAPS symbols and Time Erosion vs. Delta Effect. http://www.theoptionsinsider.com/Education/?id=492 http://www.theoptionsinsider.com/Education/?id=492 Mon, 10 Dec 2007 09:57:00 GMT Exploring the availability and pricing of LEAPS... http://www.theoptionsinsider.com/Education/?id=489 http://www.theoptionsinsider.com/Education/?id=489 Thu, 6 Dec 2007 11:36:00 GMT LEAPS are simply long-term options that expire at dates up to 2 years and 8 months in the future, as opposed to shorter-dated options that expire within one year. http://www.theoptionsinsider.com/Education/?id=485 http://www.theoptionsinsider.com/Education/?id=485 Wed, 5 Dec 2007 11:37:00 GMT When considering any options strategy, you may want to think about Long Term Equity Anticipation Securities (LEAPS) if you are prepared to carry the position for a longer term. http://www.theoptionsinsider.com/Education/?id=484 http://www.theoptionsinsider.com/Education/?id=484 Wed, 14 Nov 2007 11:50:00 GMT Since there are so many available options - and so many ways to trade them - you might not know where to begin. But getting started is easier than you think, once you determine your goals... http://www.theoptionsinsider.com/Education/?id=462 http://www.theoptionsinsider.com/Education/?id=462 Tue, 13 Nov 2007 11:52:00 GMT Since there are so many available options - and so many ways to trade them - you might not know where to begin. But getting started is easier than you think, once you determine your goals... http://www.theoptionsinsider.com/Education/?id=459 http://www.theoptionsinsider.com/Education/?id=459 Tue, 6 Nov 2007 11:54:00 GMT What is an option and what gives it value? In this article, we take a look at why options are insurance against financial uncertainty and why this insurance is often more reasonably priced than you might think. http://www.theoptionsinsider.com/Education/?id=451 http://www.theoptionsinsider.com/Education/?id=451 Mon, 5 Nov 2007 11:56:00 GMT What is an option and what gives it value? In this article, we take a look at why options are insurance against financial uncertainty and why this insurance is often more reasonably priced than you might think. http://www.theoptionsinsider.com/Education/?id=448 http://www.theoptionsinsider.com/Education/?id=448 Fri, 2 Nov 2007 11:57:00 GMT What is an option and what gives it value? In this article, we take a look at why options are insurance against financial uncertainty and why this insurance is often more reasonably priced than you might think. http://www.theoptionsinsider.com/Education/?id=445 http://www.theoptionsinsider.com/Education/?id=445 Thu, 1 Nov 2007 12:02:00 GMT Exploring the basics of time decay... http://www.theoptionsinsider.com/Education/?id=444 http://www.theoptionsinsider.com/Education/?id=444 Fri, 19 Oct 2007 12:09:00 GMT The world of options is dominated by four mathematical variables: Delta, Gamma, Theta and Vega. Collectively they are known as "The Greeks," although options traders often add their own colorful adjectives when their P and Ls begin to sink... http://www.theoptionsinsider.com/Education/?id=425 http://www.theoptionsinsider.com/Education/?id=425 Mon, 18 Jun 2007 12:18:00 GMT After going through the basic options information on this site, you should now have a solid understanding of what a stock option is, what LEAPS are and what factors contribute to an options value... http://www.theoptionsinsider.com/Education/?id=267 http://www.theoptionsinsider.com/Education/?id=267 Fri, 15 Jun 2007 12:21:00 GMT What is "pin risk" and what can you do about it? http://www.theoptionsinsider.com/Education/?id=265 http://www.theoptionsinsider.com/Education/?id=265 Thu, 14 Jun 2007 12:22:00 GMT It and s expiration week and once again our email is full of questions about pin risk. In this article, we and ll discuss what pin risk is and what can you do about it. http://www.theoptionsinsider.com/Education/?id=263 http://www.theoptionsinsider.com/Education/?id=263 Tue, 12 Jun 2007 12:23:00 GMT "The Greeks" are a collection of statistical values (expressed as percentages) that give the investor a better overall view of how a stock has been performing. These statistical values can be helpful in deciding what options strategies are best to use. http://www.theoptionsinsider.com/Education/?id=259 http://www.theoptionsinsider.com/Education/?id=259 Mon, 11 Jun 2007 12:24:00 GMT Overviews of options volatility and the groundbreaking Black-Scholes formula. http://www.theoptionsinsider.com/Education/?id=256 http://www.theoptionsinsider.com/Education/?id=256 Wed, 28 Feb 2007 11:27:00 GMT A basic primer on the world of options. http://www.theoptionsinsider.com/Education/?id=136 http://www.theoptionsinsider.com/Education/?id=136 Wed, 21 Feb 2007 11:27:00 GMT A basic primer on the world of options. http://www.theoptionsinsider.com/Education/?id=133 http://www.theoptionsinsider.com/Education/?id=133 Tue, 20 Feb 2007 11:28:00 GMT A basic primer on the world of options. http://www.theoptionsinsider.com/Education/?id=132 http://www.theoptionsinsider.com/Education/?id=132 Thu, 15 Feb 2007 11:28:00 GMT A basic primer on the world of options. http://www.theoptionsinsider.com/Education/?id=129 http://www.theoptionsinsider.com/Education/?id=129 Mon, 12 Feb 2007 23:59:00 GMT A basic primer to the world of options. http://www.theoptionsinsider.com/Education/?id=128 http://www.theoptionsinsider.com/Education/?id=128 Wed, 17 Jan 2007 02:20:00 GMT An Intro to Options for the Timid Investor http://www.theoptionsinsider.com/Education/?id=98 http://www.theoptionsinsider.com/Education/?id=98