Succeeding in Options Trading

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The beginning options trader may run across ads on the internet promising automatic profits in trading options. Anyone making a living trading options knows that profits are not automatic and that succeeding in options trading requires knowledge, dedication and skill. On the other hand succeeding in options trading [...]

Options Trading Leverage

Options trading leverage is what attracts many to options trading. In the various kinds of options trading, the ratio of change of the price of the option to the change in the underlying equity price is the delta. For example, a delta of 0.8 means that for every dollar the equity [...]

Buying Puts on the Financial Select Sector SPDR

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Buying puts on the financial select sector SPDR multiplied recently as the government entered into consideration of new regulations. Puts to sell outnumbered calls to buy by roughly twenty to one as the SPDR fund price fell nearly two percent, to just above $14 a share. The huge difference has arisen as congress [...]

Trading Steel Options

There is opportunity in steel price volatility. North American steel producers are pressuring officials in Canada, Mexico, and the USA to put pressure on China to revalue the Yuan. Their goal is a “large and sustained appreciation” of the Chinese currency. A more expensive Yuan would drive up the price of [...]

Trading Gold Options

As the price of gold overtakes the dollar’s rise, trading gold options could be a good idea. In tough economic times there tends to be a flight to the dollar and a flight to gold when other currencies appear threatened. Part of the recent rise in the value of gold was masked [...]

Crisis Options Trading

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Crisis options trading is emerging as European debt worries continue and investors ignore promising US job data. In times of great volatility and brewing crisis options traders tend to use strategies such as a long straddle where they buy both a call and a put on the [...]

Good Times for Trading Options

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Bad times for investing in stocks are often good times for trading options. Such are the times today. Volatility is the order of the day. One is reminded of Alvin Toffler’s book, “Future Shock,” in which he, correctly, predicted 40 years ago that society would not only change going [...]

Options Trading CBOE

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After 37 years as a private member owned organization the Chicago Board Options Exchange (CBOE) is filing an initial public offering for up to $300 million. CBOE was the world’s first marketplace for options. Founded in 1973 CBOE’s daily trading volume has reached to over a [...]

Covered Options Trading

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Covered options trading means trading options on stock that you already own. Covered options trading does not provide the leverage that uncovered options trading does but it is typically safer. Investors usually sell options on stock that they already own to increase their profits. Investors buy put on stock [...]

Interest Rate Option Trading

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The Chicago Board Options Exchange (CBOE) offers interest rate option trading. CBOE describes interest rate options as “European-style, cash-settled options on the yield of U.S. Treasury securities.” This is one of the kinds of options trading that deals solely in projected interest rates. These options trade in U.S. [...]

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