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Total: 36 results found.

1. AAPL Earnings Spread and Update
(OBB Prodigy!/Delta Strike)
... you sell first and ask questions later. And this was against the most profitable powerful bank out there so it caught everyone off guard. Oh and by the way this just happened to fall on April options expiration ...
Saturday, 17 April 2010
... positioned in the event we enter a substantial correction (i.e. 10% or more). Note however that a number of short leg options in the portfolio are nearing expiration, including WMT calls in April, UTA ...
Sunday, 04 April 2010
3. Theta Burn: Weekly Update and New Trade
(OBB Prodigy!/Theta Burn)
... products company, by selling 4 May $62.5s and buying 5 Jan 2011 $60s. This is a similar position to the WMT spread, in that its designed to allow me to roll the short month calls forward once we near expiration ...
Friday, 26 March 2010
4. Weekly Recap
(OBB Prodigy!/Delta Strike)
... uncertainty regarding the European bailout of Greece, the Dow stumbled to a 0.34% loss for the day. Quad witching options expiration may have contributed to the start a pullback in the market Friday ...
Sunday, 21 March 2010
5. FXE Put Spread
(OBB Prodigy!/Delta Strike)
... is very hard for me to have conviction in starting a new position with the market up 15 straight days or whatever it is and plus it was quad-witching options expiration on Friday so it really is better ...
Friday, 19 March 2010
6. Theta Burn: BKE Update and New Trade
(OBB Prodigy!/Theta Burn)
... (effectively selling the spreads for their natural $5.00 spread price). I would have much preferred the stock stay flat around $28 or $30 per share until March options expiration. As I've discussed in ...
Thursday, 18 March 2010
7. Weekly Outlook 3/15
(OBB Prodigy!/Delta Strike)
... to see the same short term reaction. Quad witching option expiration week is also here and that adds to market volatility as well. I think this is a very important week to watch transpire. For swing ...
Monday, 15 March 2010
8. Portfolio Update
(OBB Prodigy!/Theta Burn)
...  This coming week I'll need to exit the BKE diagonal call spread as each leg is now deep in the money and its options expiration week. Unfortunately closing this spread will be more complicated than usual. ...
Saturday, 13 March 2010
9. Portfolio Update + New Trade
(OBB Prodigy!/Theta Burn)
... if the stock is at or above $10 per share at May expiration). IV as of today was around 90%, resulting in high premiums. Because I don't mind the possibility of exercise and holding the stock outright, ...
Wednesday, 10 March 2010
10. New Trade - WMT Diagonal Call Spread
(OBB Prodigy!/Theta Burn)
... movement this will be a campaign-style rolling spread. As the April calls near expiration, I'll roll out a few months and so on and so on. This position is very much a synthetic covered call that utilizes ...
Friday, 05 March 2010
11. IBM Modified Calendar Call Spread
(OBB Prodigy!/Theta Burn)
... from a steady run-up in price. The modified $140 calendar spread does just that - as we near expiration in Jan 2011, if IBM’s stock price (which is currently in the $126 range) trades around $140 the spread ...
Wednesday, 24 February 2010
12. Weekly Recap
(OBB Prodigy!/Delta Strike)
... would have responded this well if it weren't options expiration. Nevertheless the market kept its head above water as the dollar retraced a bit and commodities held strong. Next week should be telling ...
Saturday, 20 February 2010
13. RIMM update and New Trade
(OBB Prodigy!/Delta Strike)
... puts in the anticipation of a shallow retracement in the stock. You should exit this trade if you haven't already since it is expiration Friday. As for RIMM going forward I think there is still a good ...
Friday, 19 February 2010
14. And We're Off!
(OBB Prodigy!/Theta Burn)
... returns on equity. Given the market’s concerns, I don’t think LO has much “pop” potential, but will likely stay near its current price through expiration of the June month options. This spread has substantial ...
Friday, 19 February 2010
15. Diagonal/Calendar - TLT
(OBB Prodigy!/Option Spot)
... What questions are you asking yourself, pre-trade?  How closely are you studying the relationship of Theta between the long/short leg, IV, DTE (days till expiration), months between legs, etc?  ...
Tuesday, 16 February 2010
16. Weekly Outlook 2/15
(OBB Prodigy!/Delta Strike)
... 1060 mark into expiration friday where there is tons of put open interest at the 106 strike in SPY. Alternatively, options expy may simply allow stocks to grind up slowly into resistance without a reversal ...
Monday, 15 February 2010
17. Introduction
(OBB Prodigy!/Theta Burn)
... changed the dynamic of the position so that it would be solidly profitable in the mid to high 70s at expiration. Over the last two weeks, time decay (or theta) has started to really kick in and the position ...
Saturday, 13 February 2010
18. 1.8- LEAPS
(Courses/Freshman 100 Level)
Long-term equity anticipation securities (LEAPS) are option contracts with expiration dates of nine months or more into the future. LEAPS are traded the same as other option contracts. The advantage is ...
Wednesday, 30 December 2009
19. 10.2- Trading Plan: Strategy Analysis
(Courses/Master 400 Level)
... on equity 3) Specific details regarding expiration 4) Exits & stop losses 5) If / When statements 6) Underlying stock specifics 7) Volume & bid/ask requirements 8) Analysis of ...
Tuesday, 15 December 2009
20. 6.0- Chapter 6: Vertical Spreads
(Courses/Undergraduate 200 Level)
... of spread in which an investor simultaneously buys a call or put option and writes a further OTM option with the same expiration date. The position creates a net debit because the purchased option has ...
Tuesday, 24 November 2009
21. 5.9- Rho
(Courses/Undergraduate 200 Level)
... Rho for calls and puts with the same strike price and expiration date will be equal, bounded by what is known as put-call parity. This will be discussed in a future lesson. Rho is positive for long call ...
Tuesday, 24 November 2009
22. 5.7- Vega (Long Options)
(Courses/Undergraduate 200 Level)
... long Vega positions and positive for short Vega positions) Puts and calls with the same expiration month, underlying stock and strike price will typically have the same Vega. ATM options have higher ...
Tuesday, 24 November 2009
23. 5.6- Theta (Short Options)
(Courses/Undergraduate 200 Level)
... of expiring ITM are higher. There are many strategies that investors use to sell option contracts to take advantage of time decay. Selling OTM options with short times until expiration can be very profitable ...
Monday, 23 November 2009
24. 5.5- Theta (Long Options)
(Courses/Undergraduate 200 Level)
Theta (θ), better known as time decay, measures the theoretical loss of an option’s extrinsic value as the expiration date of the contract approaches. Theta represents the extrinsic (time) value ...
Monday, 23 November 2009
25. 5.0- Chapter 5: Meet the Greeks
(Courses/Undergraduate 200 Level)
... the change in the option price as time until expiration approaches (on a daily basis). Vega (v) Measures the change in the option price when the Implied Volatility (IV) of the underlying stock ...
Saturday, 21 November 2009
26. 4.1- Option Pricing Basics
(Courses/Undergraduate 200 Level)
... to how option premiums are valued. There are six inputs that are used to determine the value of an option contract. They are the underlying stock price, strike price, time until expiration, volatility, ...
Thursday, 19 November 2009
27. 4.0- Chapter 4: Options Pricing
(Courses/Undergraduate 200 Level)
... 1.4, European-style option contacts can only be exercised at expiration, whereas American-style options can be exercised at any time before expiration. This obviously makes the Black-Scholes model imperfect. ...
Thursday, 19 November 2009
28. 3.1- Reading Option Chains
(Courses/Freshman 100 Level)
... sorted into groups by the expiration month and strike price. Bid/Ask Spread The Bid represents the price which buyers are willing to pay and the Ask represents the price sellers are willing to accept. ...
Monday, 16 November 2009
29. 2.3- Short Option Risk Graphs
(Courses/Freshman 100 Level)
... contract. However, if the option contract is not exercised the call writer keeps the premium at expiration. An investor is not required to own the underlying stock in order to write a call option (the ...
Monday, 16 November 2009
30. 2.2- Long Option Risk Graphs
(Courses/Freshman 100 Level)
... it, the investor could simply purchase a call option. The strike price of the call option would allow the investor to buy 100 shares of the underlying stock at that price between now and expiration, no ...
Monday, 16 November 2009
31. 1.7- Exercise & Assignment
(Courses/Freshman 100 Level)
As we have talked about, option contracts give the buyer the right to exercise the  contract at any time before expiration (assuming American-style). When this happens, the seller of the option contract ...
Monday, 16 November 2009
32. 1.6- Option Prices (Premium)
(Courses/Freshman 100 Level)
... contract. It can be thought of as the value of the contract if expiration was today. Extrinsic value is a combination of the time until expiration and the possibility that the contract will finish In-the-Money. ...
Monday, 16 November 2009
33. 1.5- Option Expiration Cycle
(Courses/Freshman 100 Level)
Expiration dates for option contracts on a certain underlying stock follow a predictable cycle. Every stock with listed options is part of one of three annual cycles that remains the same each year. The ...
Monday, 16 November 2009
34. 1.4- Option Styles
(Courses/Freshman 100 Level)
... to exercise the option contract at ANY TIME before expiration. European-style European-style options allow the option buyer to exercise the option contract ONLY on the last trading day before expiration. ...
Monday, 16 November 2009
35. 1.2- Basic Option Terminology
(Courses/Freshman 100 Level)
... has a strike price. This is the fixed price at which the underlying asset may be purchased or sold at. Expiration Date Each option contract has an expiration date. This is the latest date in ...
Sunday, 15 November 2009
36. 1.1- Option Basics
(Courses/Freshman 100 Level)
... the right, but not the obligation, to purchase the underlying stock at a fixed price any time before the expiration date of the contract. Put Option a contract that grants the buyer the right, ...
Sunday, 15 November 2009

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