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1. MACD exposed
(OBB Prodigy!/Option Spot)
... the underlying is trading above its y-day EMA, or only when the stock is short-term oversold, or when using MACD(6,13,5), etc.  You may even find that through better money management (position sizing, ...
Sunday, 28 February 2010
2. Introduction
(OBB Prodigy!/Theta Burn)
... me, but not because of the fundamentals of the underlying company but because of short term price movement, I'll often add to the position (I don't use stop losses). I'll take gains when either the option ...
Saturday, 13 February 2010
3. 1.8- LEAPS
(Courses/Freshman 100 Level)
... the ability to make investment decisions that implement long-term investing strategies. Using LEAPS, these strategies are not as influenced by shorter-term moves in the underlying asset as a front-month ...
Wednesday, 30 December 2009
4. 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
5. 10.0- Putting the pieces together
(Courses/Master 400 Level)
... of a trading plan into steps. Here is a general outline: 01 Trading Plan overview and mission statement 02 Detailed analysis of each trading strategy 03 Identification of tradable underlying stocks ...
Tuesday, 15 December 2009
6. 6.4- Bear Call Spread (Credit Spread)
(Courses/Undergraduate 200 Level)
Investors use bear call spreads when they are neutral to bearish on an underlying stock. By writing OTM call options, investors want the underlying stock to stay where it currently is or go lower. As the ...
Wednesday, 25 November 2009
7. 6.3- Bear Put Spread (Debit Spread)
(Courses/Undergraduate 200 Level)
Investors use bear put spreads when they are bearish on an underlying stock. The higher strike put is purchased and the lower strike put is written. This creates a net debit that is less than if the higher ...
Wednesday, 25 November 2009
8. 6.2- Bull Call Spread (Debit Spread)
(Courses/Undergraduate 200 Level)
Investors use bull call spreads when they are bullish on an underlying stock. The lower strike call is purchased and the higher strike call is written. This creates a net debit that is less than if the ...
Wednesday, 25 November 2009
9. 6.1- Bull Put Spread (Credit Spread)
(Courses/Undergraduate 200 Level)
Investors use bull put spreads when they are neutral to bullish on an underlying stock. By writing OTM put options, investors want the underlying stock to stay where it is currently or go higher. As the ...
Wednesday, 25 November 2009
10. 6.0- Chapter 6: Vertical Spreads
(Courses/Undergraduate 200 Level)
... position on an underlying stock. The debit spread reduces initial outlay cost to open a position and the credit spread has a high probability of success even if the underlying stock is neutral in price ...
Tuesday, 24 November 2009
11. 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
12. 5.8- Vega (Short Options)
(Courses/Undergraduate 200 Level)
This lesson will cover short Vega positions. As state in the previous lesson, Vega is the rate of change of an option’s theoretical value relative to change in the underlying stock’s Implied Volatility. ...
Tuesday, 24 November 2009
13. 5.7- Vega (Long Options)
(Courses/Undergraduate 200 Level)
... Level courses will spend extra time regarding the subject. Vega is the rate of change of an option’s theoretical value relative to the change in the underlying stock’s Implied Volatility ...
Tuesday, 24 November 2009
14. 5.4- Gamma (Short Options)
(Courses/Undergraduate 200 Level)
... This is an important  point to remember. Gamma will increase the change in Delta of a short call option as the underlying stock price increases. Gamma will decrease the Delta of a short call option ...
Saturday, 21 November 2009
15. 5.3- Gamma (Long Options)
(Courses/Undergraduate 200 Level)
Gamma (Γ) represents the change in Delta as the underlying stock price changes. This lesson will focus on Gamma long positions. Gamma is POSITIVE for BOTH long call options and long put options. This ...
Saturday, 21 November 2009
16. 5.2- Delta (Short Options)
(Courses/Undergraduate 200 Level)
... has a Delta of -.14, the investor can theoretically expect to incur losses when the underlying stock moves up in value and profit when the underlying stock moves down in value. Short Call = Bearish Position ...
Saturday, 21 November 2009
17. 5.1- Delta (Long Options)
(Courses/Undergraduate 200 Level)
Delta (∆) is the rate of change of an option's value relative to the change in the underlying stock price. Delta can be defined in many ways: 01The rate of change of an option's value relative ...
Saturday, 21 November 2009
18. 5.0- Chapter 5: Meet the Greeks
(Courses/Undergraduate 200 Level)
... in the option price in relation to a $1 move of the underlying stock price. Gamma (Γ) Measures the change in Delta in relation to a $1 move in the underlying stock. Theta (θ) Measures ...
Saturday, 21 November 2009
19. 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
20. 3.4- Market Makers
(Courses/Freshman 100 Level)
... underlying stock. This is where the market makers step in and take the opposite side of trades for both buyers and sellers of option contracts. Market makers attempt to remain completely hedged at all ...
Wednesday, 18 November 2009
21. 3.1- Reading Option Chains
(Courses/Freshman 100 Level)
Option chains list the available option contracts that can be traded on an underlying stock. Not all stocks will have option contracts available to trade and the contracts will vary based on the underlying ...
Monday, 16 November 2009
22. 3.0- Chapter 3: Options in the Marketplace
(Courses/Freshman 100 Level)
... to focus on how option contracts can be used to profit from speculation of expected future prices. Suppose an investor is bullish on a underlying stock but not interested in actually owning the stock? ...
Monday, 16 November 2009
23. 2.3- Short Option Risk Graphs
(Courses/Freshman 100 Level)
... a call option the risk graph looks like the picture below. The call writer receives a premium in exchange for selling a call buyer the right to take the underlying stock away from them. For example, if ...
Monday, 16 November 2009
24. 2.2- Long Option Risk Graphs
(Courses/Freshman 100 Level)
... that the underlying stock price is going to increase or 2) they want the right to buy the stock, but not the obligation. If the investor is speculating, they can profit from increases in the underlying ...
Monday, 16 November 2009
25. 2.0- Chapter 2: Introduction to Risk Graphs
(Courses/Freshman 100 Level)
... horizontal X-axis (running left to right along the bottom) represents the underlying stock price. Breakeven Line The breakeven line (running left to right in the middle of the graph) represents ...
Monday, 16 November 2009
26. 1.7- Exercise & Assignment
(Courses/Freshman 100 Level)
... a put) the underlying stock. Assignment Occurs when an investor who is short a call or put option is forced to sell (in the case of the call) or buy (in the case of a put) the underlying stock. ...
Monday, 16 November 2009
27. 1.6- Option Prices (Premium)
(Courses/Freshman 100 Level)
... further. They are: In-the-Money (ITM) The intrinsic value of an option contract is different for call and put options. A call option is ITM if the underlying stock price is greater than the strike ...
Monday, 16 November 2009
28. 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
29. 1.4- Option Styles
(Courses/Freshman 100 Level)
...  Typically, option contracts that represent underlying stocks are American-style and contracts representing indexes (DOW Jones, S&P 500, etc.) are European-style.  ...
Monday, 16 November 2009
30. 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
31. 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
32. 1.0- Chapter 1: What Are Options?
(Courses/Freshman 100 Level)
... A derivative is a financial instrument (an agreement between two parties) that “derives” its value from an underlying asset. There are many reasons investors utilize option contracts. They ...
Saturday, 14 November 2009

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