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Showing results for tags 'option strategy'.
Found 9 results
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A frequently mentioned strategy for acquiring shares of a desirable stock is that of selling naked puts and waiting to have the stock assigned. Advocates of this strategy argue that this is a great way to buy a stock at a discount price. While there is some potential value to this strategy, it is un... -
A major barrier to option trading for the average retail investor is the complete lack of relevant and pertinent information available regarding the intricacies of options. Anyone that has attempted to learn option trading from scratch knows how painstaking a process it can be. Outside of the "onlin...
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Traders who implement a conversion strategy are taking advantage of overpriced assets by instantly liquidating (arbitraging) them to fair market value. The technique involves selling and purchasing a put and a call option, at-the-money, while going long on the underlying asset. Traders can earn a sm...
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Traders who implement a reversal strategy are taking advantage of under priced assets by instantly liquidating (arbitraging) them to fair market value. The technique involves selling and purchasing a put and a call option, at-the-money, while short selling the underlying asset. Traders can earn a sm...
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Traders who implement a short box strategy are taking advantage of overpriced assets by instantly liquidating (arbitraging) them to fair market value. The technique involves selling both a bull call and bear put spread at the same time, using options with parallel strike prices and expirations. Trad...
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A trader who implements a synthetic short stock (split strikes) is betting that an asset's value will fall. The technique involves buying the same number of call and put options for an underlying asset with the same expiration. Both the profit potential and the risk involved when using this strategy...
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Traders who implement a synthetic short call strategy are betting that the market price of an option's underlying asset will fall. The technique involves short selling owned assets and selling a put option for the amount of shares owned. The loss-risk in this strategy is unlimited, if the market pri...
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Traders who sell index puts are betting that the market price of the index's underlying value will go up. The strategy involves selling a put that's associated with a stock market index. The index plays the same role as an underlying asset does in normal options trading. Investors settle their exerc...
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Traders who enter married put strategies want to own an option's underlying asset, but are unsure if the asset's bullish trend will continue in the short-term. The strategy involves buying a put option ATM and buying the same number of regular shares of the underlying asset. When traders buy the put...
