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Total: 10 results found.

1. 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
2. 1.8- LEAPS
(Courses/Freshman 100 Level)
... of the extrinsic value of an option contract because of their longer lifespan. Of course, the option premium will reflect the added extrinsic value, meaning premiums will be higher in most cases. An ...
Wednesday, 30 December 2009
3. 10.2- Trading Plan: Strategy Analysis
(Courses/Master 400 Level)
... preferred non-directional position candidates. This is important because low Beta underlying issues typically have lower premiums priced into the options, which increases the risk and commission levels ...
Tuesday, 15 December 2009
4. 5.9- Rho
(Courses/Undergraduate 200 Level)
... for short Rho positions) The reason interest rates have an effect on option premiums is that if interest rate rise, it becomes more expensive to hold an underlying stock position, thus increasing the ...
Tuesday, 24 November 2009
5. 5.8- Vega (Short Options)
(Courses/Undergraduate 200 Level)
... For written option positions, Vega is ALWAYS negative. This means a rise in the underlying stock’s IV will lead to increasing option premiums, which is negative for written (short) positions. Remember, ...
Tuesday, 24 November 2009
6. 5.7- Vega (Long Options)
(Courses/Undergraduate 200 Level)
... (IV). Vega is positive for long call and long put positions and negative for short call and short put positions. The reason for this is because rising IV increases option premiums. Vega is represented ...
Tuesday, 24 November 2009
7. 5.3- Gamma (Long Options)
(Courses/Undergraduate 200 Level)
... Gamma relationship to Delta can be confusing at first. Just remember that both relationships work together: Call premiums increase faster as Gamma increases Delta. Put premiums increase faster as Gamma ...
Saturday, 21 November 2009
8. 4.1- Option Pricing Basics
(Courses/Undergraduate 200 Level)
Up until now, we have vaguely mentioned that option premiums fluctuate with the movement in the underlying stock. However, it is much more complicated than that. In this lesson we will address the basics ...
Thursday, 19 November 2009
9. 4.0- Chapter 4: Options Pricing
(Courses/Undergraduate 200 Level)
... Before the model was released, there was no clear way to value option contract premiums. Unfortunately, the model was designed for European-style, non-dividend paying stocks. If you recall from lesson ...
Thursday, 19 November 2009
10. 1.1- Option Basics
(Courses/Freshman 100 Level)
... before expiration. Option prices (premiums) are quoted on a per share basis. For example, if an option contract costs $2.80 to purchase, the real cost of the option contract would be $280 ($2.80 x 100 ...
Sunday, 15 November 2009

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