Wednesday, September 19th, 2018

United States vs. Other Options Trading

November 26, 2009 by T.D. Thompson  
Filed under Options Trading Tips

The rules of options trading vary from country to country. In the United States it is possible to trade options and to exercise options throughout the life of the options contract. On the other hand a European option can only be exercised upon expiration. A general term for a complex option contract is an “exotic” [...]

Kinds of Options Trading

November 26, 2009 by T.D. Thompson  
Filed under Options Trading Tips

The kinds of options trading available include over-the-counter options trading and exchange options trading, or trading listed options. Exchange traded options are, in fact, exchange traded derivatives. The trades are guaranteed by the credit of the exchange. In exchange options trading you can trade stock options, commodity options, bond and other interest rate options, stock [...]

Risk Management in Option Trading

November 26, 2009 by T.D. Thompson  
Filed under Options Trading Tips

In option trading there is always risk and there is always the potential for reward. If option trading is your business you will always have losers as well as winners. The goal of successful options trading is to win more than you lose, hopefully a lot more than you lose. You win in doing option [...]

Counterparty Risk in Option Trading

November 26, 2009 by T.D. Thompson  
Filed under Options Trading Tips

Counterparty risk is an often-forgotten risk management matter in option trading. Counterparty risk is the risk that the seller of an option will not sell when the buyer chooses to exercise the option. You buy a put on IBM believing it will go down and it does, substantially. You exercise the option expecting to sell [...]

Occasional Options Trading

There are two kinds of folks who trade options. There are full time options traders for whom options trading is their business. Then there are people who have other full time work for whom options trading occasionally makes sense. If you do not engage in options trading full time when might you sell a call [...]

Making a Living Trading Options

November 25, 2009 by T.D. Thompson  
Filed under Options Trading Tips

If you make your living trading options you spend your days following the markets and learning sophisticated techniques to measure risk and opportunity. You will have the time and can learn the expertise to engage in straddles and naked call options. If you do not work at trading options full time and do not have [...]

What is an Option Worth?

November 24, 2009 by T.D. Thompson  
Filed under Options Trading Tips

The basis of options trading is to know what an option is worth. In basic terms we want to know if the difference between the strike price and the spot price will grow and in which direction. The strike price is the agreed up price that the contract will be settled for if the option [...]

Strike Prices and Spot Prices in Options Trading

November 24, 2009 by T.D. Thompson  
Filed under Options Trading Tips

If you are just getting interested in options trading you will need to learn a new set of terms. For starters options have a strike price which is also known as an exercise price and they have a spot price which is the market price when an option is exercised (at the strike or exercise [...]

When is Trading Put Options a Good Option for an Options Trader?

November 24, 2009 by T.D. Thompson  
Filed under Options Trading Tips, Put Options

For many the best option for making money in the stock market is in trading options. Options traders both buy and sell options. They sell calls and puts. That is to say options traders sell rights and options to buy or sell. Which an options trader does is based upon his or her read of [...]

When is Trading Call Options a Good Option?

November 24, 2009 by T.D. Thompson  
Filed under Call Options, Options Trading Tips

Of all the means of making a profit in the stock markets trading options is sometimes a good option. In the American stock markets you can buy or sell stock options. You can buy or sell either puts or calls in options trading. Which you do depends upon where you think a stock is going [...]