Is there a method to determine the probability of an options trade? One of the terrific characteristics of trading options versus trading stocks is that there are methods of calculating probability of profit before you initiate the trade. The features of time decay, strike price and option volatility are unique to options trading strategies and apply whether you are buying … Read More
Options Trading Basics: Calculating Return on Investment
One of the questions often asked about investing in options is “How much can I earn”? Questions like this show how easy it is to fool someone if they really don’t understand how to measure trade results from one trade to the next. To put it bluntly most options trading books don’t tell the whole story. One marketing approach actually … Read More
Avoiding Common Mistakes in Trading Weekly Options
Options with weekly expirations offer a huge improvement to the learning process for new option traders. You can increase your screen time very rapidly and see how just seven days’ difference might change how two positions react to a move in the markets. When weekly options were first introduced they quickly became a favorite vehicle to trade for many options … Read More
How to Trade In-the-Money Call Options
Go long! No, we don’t mean sending the wide receiver out for a long pass. We’re talking about using the most basic of options trades: initiating a position with a call option instead of buying 100 shares of a stock to create a long position. Options are a great way to take a position in a stock or an index. … Read More
Why is Order Flow Important?
When it comes to order flow, many newer traders tend to think of volume bars or time and sales information. It is much more than that, and it really helps to understand the premise behind how markets facilitate order flow. It may not give you an immediate strategy to make money with, but what it does is provides an added … Read More
How to Choose an Options Trading Platform
A key consideration in finding the right options broker for you is knowing which features of the broker’s trading platform are important to your options trading strategies. There are some very different approaches to delivering charts and quotes. So some of the questions you should be asking when considering an options trading platform are as follows: 1) What options for … Read More
Another Great Look at an “Income” Trade
After holding a couple of free live webcasts over the past month discussing earnings trades and adjustments, here’s yet another look at an “income” type of trade. This one popped up as a trade yesterday as the VIX starting pushing 15. But the reason for the move up in volatility becomes a two-edged sword.
Options Trading Commissions: Choosing the Best Broker
In our continued discussion about picking a broker for your options trading, one must always consider commissions. As discussed in our previous article, the good news is that rates are more competitive than at any other time. When you are just starting out learning how to trade options there are many brokers to choose from and just as many different … Read More