If you’re just starting out with Options, or if you’re already somewhat experienced with Options, you know that many mistakes occur. In fact, the biggest issue with Options trading is that there is a steep learning curve, and the fact that “you don’t know what you don’t know”..
Conditional Orders can be a fantastic tool for Options traders. In fact, I’d go a bit further and say that every Options trader must master Conditional Orders.
Every Options trading strategy is a compromise and has its pluses and minuses. To get something, you have to give up something else in return. So is there truly a Options Mastery Series of Options trading strategies ? Let’s first look at the repertoire of wonderful strategies available to all Options traders, and a review of these strategies’ pluses and minuses before we answer that question.
If you’re somewhat new to Options, you must have heard about the Option Greeks. In fact, a common rookie mistake with Options traders is that they ignore the importance of the Option Greeks (Truth be told, I’m guilty – I ignored them for almost 6 months). This is easily one of the biggest mistakes a newbie Options trader can do. Let me give you a simple analogy, and perhaps the importance of Option Greeks may hit home.
I’ve mentioned many a time that the single biggest challenge Options trading beginners face is that of trial and error in the first few months of Options trading. You think you know how Options work, and you put on a couple of trades. Occasionally, beginner’s luck favors the newbie and a couple of good outcomes is all you need to get your adrenaline pumped up. So far so good..
There is an important addition today to Options trading instruments. CBOE is introducing “Mini” Options with a base of 10 shares per contract as opposed to the standard 100 shares per contract.
In the Options world, there is a strict relationship between the prices of Puts and Calls. This relationship is called Put Call parity.
Options Liquidity In the Options world, you can measure Options Liquidity using several parameters. The more liquid an Option is, the better your chances of profits because you want to minimize “slippage” in the trade. These are the different ways to judge liquidity. 1) Bid Ask spread When you enter a trade, you’re always…
If you’re a newcomer to Options, but are familiar with investing in Stocks, the “Covered Call” should be one of the first strategies you should learn. Covered Calls can be a safe strategy to create income on stocks you already own. Ideally, you should be able to achieve a return of 1% every 15 days or about 2% a month.
Now that the market has hit 4 year highs, and many high flying stocks are also at similar levels, it may be a good time to protect your profits. Put Options are the ultimate protector for stocks you own – so let’s dig into the nuts and bolts of how Put Options work.
Page 2 of 3