Short Strangle Adjustments: Rolling Up the Short Puts Sometimes, you’ll need to make an adjustment to your option positions when the stock price moves against you.In this post, we’re going to discuss the short strangle adjustment strategy of “rolling up” the short put options. What is “Rolling an Option?”Rolling an option is the process of closing […]
Top 9 Options Trading Mistakes
Top 9 Options Trading Mistakes There are many options trading mistakes that new traders make, and that’s entirely ok! Part of the process when learning anything in life is through mistakes.With that said, it’s always good to be aware of common “land mines,” so you can make an attempt to avoid them, and ultimately protect […]
Iron Condors vs. Strangles: Profit/Loss Analysis [STUDY]
Iron Condors vs. Strangles: Profit/Loss Analysis [STUDY] Short iron condors and short strangles are very common strategies among market-neutral traders, as both strategies profit from range-bound stock price movements.However, iron condors have less risk (and therefore less reward), while strangles have more risk and more reward.How much reward do you give up when selling an iron […]
Moneyness of an Option Explained | Options Trading Concept
Moneyness of an Option Explained Options traders often use “moneyness” to describe the relationship between an option’s strike price and the current stock price.What is Option Moneyness?The moneyness of an option refers to three specific options trading terms:1. In-the-Money2. At-the-money3. Out-of-the-moneyLet’s quickly discuss each of these terms in regards to call and put options.What is […]
Top 3 Credit Spread Option Strategies for Generating Income
Top 3 Credit Spread Option Strategies for Generating Income Credit spreads are very common among traders who trade options for income, as credit spread option strategies can profit in more than one way. Additionally, credit spreads have limited loss potential, which means losing trades won’t break the bank if sized properly.In this post, we’ll cover […]
What is Option Buying Power? | Options Trading Concept
What is Option Buying Power? When trading stocks, options, or futures, you have to have the appropriate amount of cash available in your account to open a position. The term “Buying Power” refers to the amount of money in your account that is readily available to allocate to new positions. Stock buying power and option buying power […]