The great thing about a straddle is that it’s non-directional. This means that you can make money without forecasting market direction. In other words, it doesn’t matter whether the stock price goes up or down in the near future – you can still make money either way – as long as it moves somewhere. The [...]
Beyond all the ‘hype’ what is it that makes option trading so good?
This is a question that I wish more people would ask, but the thing is not too many people know they even exist!
The main reason that I love option trading is that options provide the opportunity to turn a small or modest amount [...]
When traders speak of putting on calendar spreads, they normally refer to buying the further month options and selling the closer month option. While I can not argue with this, it is not best for all options.
I am going to be general in this article because prices change and I don’t want to cause confusion.
For [...]
Most trading literature on option strategies tend to lean towards mathematical formulas to define the construction of a spread. Guy Cohen has chosen to use pictorial logic, even with the Greeks unique to a particular strategy, to piece together the legs of a spread with diagrams.Diagrams that connect with each other are a much more [...]
Robert Kiyosaki says that Option Trading is the investment of the rich.
Indeed, option trading is the most versatile form of investment in the world today. Its versatility has been the topic of many speakers all over the world. Terms such as “Covered Calls” and “Credit Spreads” have become well known amongst traders new and veteran [...]
Paper trading using one of the many virtual trading systems provided by option brokers, and now CBOE, is so important if you have never traded options. This is especially important trading credit spreads, like Bull Puts and Bear Calls and ultimately Iron Condors. These are special strategy trades that must that must be fully understood [...]
Once you own an investment property, or a piece of investment real estate, then you need to make money from it. If you’re not going to sell it on, then you would typically rent it out to a tenant. The rent covers the mortgage payments, with perhaps a bit left over for repairs and so [...]
Options trading is an investment vehicle for experienced investors, who track their investments proactively. It is not a suitable vehicle for investors looking to maintain assets without direct management, as it’s very much a timing related purchase and float. Options trading is an excellent technique for using financial leverage to make bigger purchases.
A [...]
What is the difference? Some may shout.
There is indeed a very BIG difference. I used to search for options strategies all the time as I thought it will make me a better trader. But does it really help a trader to trade better?
My answer is Yes (30%) and No (70%). Most “options strategies” [...]
There are 2 kinds of option trading systems in general; Discretionary and Mechanical. A discretionary option trader follows no specific rules but chooses, enters and exits an option trade using all of his knowledge or gut feeling. A mechanical option trader is one who translates his knowledge of choosing stocks, entry and exit into objective [...]