The long straddle is a strategy for the trading of options where the trader purchases both a long put and a long call for the same security, strike price and expiration date. The strike prices are usually in the money or close to the current market price for the underlying asset. The long straddle is […]
A Golden Cross is an indicator for bullish breakout patterns that are formed when an asset’s short-term moving average (STMA), such as the 50-day, crosses over its long-term moving average (LTMA), such as the 200-day. These crossings signify breaks above key levels of resistance. Since the LTMA indicator is more influential, golden crosses are […]
The OTC markets, short for Over The Counter, allows for the trading of assets without the formal structure of an official exchange. This means that the trades are made in private between clients and dealers, or intra-dealer trades, without the price or terms of the trade being made public. This arrangement is in stark contrast […]
A credit spread involves simultaneously selling and purchasing an option on the same underlined futures contract but at different strike prices. The option that you sell is going to be at a higher level or closer to money than the option you purchase, resulting in a net credit for the trade. Options that are closer […]
If the idea of investing your hard-earned dollars into potentially risky, but then again, potentially profitable investment options, there may be a solution that will help to put your mind at ease. A commonly used risk-management strategy for investors who are a little unsure about whether or not their investment will definitely be a profitable […]
For the investor who wants to minimize the risks involved with trading stocks, a covered call is a type of options strategies that can actually be profitable and hedge your long position at the same time. In order to use a covered call option, an investor would need to be the owner of the […]
Tune in to any stock market news broadcast and you are bound to hear about the momentum of the market in one direction or the other. Newscasters are always talking about “which way the market is heading” and similar topics. As an observer you might wonder what it is that they are getting at exactly […]
Options are a way for investors to get involved with the markets even if they do not have that many funds to get started. Many investors are hesitant to get involved with options because they seem too complicated. However, with just a little education on these it becomes a lot more clear. There are benefits […]
A debit spread is an options strategy that seeks to maintain maximum profit. It achieves this by capitalizing on the difference from the premium paid for long component of the spread less the premium paid for short component of the spread. It involves two options – call or puts. One option has a lower […]
Delta is a simple measure used in derivatives trading to indicate the relation between the price of an option and the price of its underlying security. The delta of an option is the discount factor that will directly translate the price change in a security into the price change of that option. The delta […]
