If you bought a stock option, it could be “in the money.” But what does that mean? It means that, for the moment, the underlying stock has moved beyond the option’s strike price. There’s a lot to unpack in that last sentence. I’ll do so in this guide. The Strike… Read More

If you bought a stock option, it could be “out of the money.” But what, exactly, is “out of the money”? It means that, for the moment, the underlying stock has yet to move beyond the option’s strike price. There’s a lot going on in that last sentence. I’ll break… Read More

When it comes to choosing an online broker, there are countless choices. But are some of them better for options trading than others? In a word: yes. For starters, you need to pay attention to commission costs. If you pick a broker that charges a high fee for trades, any… Read More

If you’re serious about making money with options, then you might be asking yourself: “What is the cheapest brokerage for options trading?” First of all: congratulations. It’s a very good that you’re even asking that question. Trading options can get very expensive with the wrong broker. That’s especially the case… Read More

If you’re new to trading, you might be wondering if options trading can put you into debt. In a word: yes. However, it doesn’t have to. You can also trade with no debt. The choice is up to you. In this guide, I’ll explain how trading options can put you… Read More

Options contracts tend to decrease in value as they get closer to expiration. That’s called time-decay. Simply put: you can lose money with options even if you make the right call about the underlying security but ignore time-decay. On the other hand, you can also let time-decay work in your… Read More

If you’d like to know how a change in implied volatility will affect the price of an options contract, you’ll have to look at vega. Vega is one of “the Greeks.” Those are measurements that give traders insight into how an option will respond to various market forces. Other Greeks… Read More

If you’re serious about trading options, then you need to understand implied volatility (or IV). Why? Because it’s a stat that helps you place winning trades. If you don’t pay attention to IV, you could end up buying high or selling low. In either case, you’re more likely to lose… Read More

How much does an option change in value as its underlying stock price moves one way or the other? The answer to that is the delta calculation. Delta is one of “the Greeks.” Those are statistical values that give you important info about options. Other Greeks include theta, vega,… Read More

How would you like to profit from a stock that moves significantly in either direction? If so, then consider the long strangle strategy. The key here is that you need large movement in the underlying stock for the trade to be profitable. It doesn’t matter which way the stock moves,… Read More