Color in option trading refers to the difference in the bid and ask price of an option. The bid price is the price that a trader is willing to pay for an option, while the ask price is the price that a trader is willing to sell an option. The difference between the bid and … Read more
A put calendar is an options trading strategy that involves buying a put option with a longer expiration date and selling a put option with a shorter expiration date. The trade is typically done when the underlying stock is expected to experience a short-term decline followed by a rebound. Are calendar spreads the best? There … Read more
A bull call spread is an options trading strategy that involves buying and selling call options with different strike prices. The strike price of the call option you buy will be lower than the strike price of the call option you sell. The main advantage of this strategy is that it limits your downside risk … Read more
A risk reversal is an options trading strategy that involves buying and selling options with different strike prices, but with the same expiration date. The strategy is used when the trader believes that the price of the underlying asset will move up or down, but is unsure of which direction it will move. The risk … Read more
A call warrant is an options trading strategy that involves purchasing a call option on a stock or other security. The call option gives the holder the right, but not the obligation, to buy the underlying security at a specific price (the strike price) on or before a certain date (the expiration date). Call warrants … Read more
A vanilla option is a financial instrument that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price on a specified date. Vanilla options are the most common type of options traded in financial markets. The underlying asset can be a stock, a bond, a … Read more
LEAPS: How Long-Term Equity Anticipation Securities Options Work Are LEAPS long term capital gains? Yes, LEAPS are long-term capital gains. LEAPS are designed to provide investors with the ability to hold a stock or security for a long period of time, and as such, the gains on these investments are typically taxed at the lower … Read more
Zomma is a term used in options trading that refers to the change in the price of an option contract in response to a change in the underlying asset’s volatility. The term is used to describe the relationship between an option’s price and the underlying asset’s volatility. What are the best Greeks for options? There … Read more
A reverse calendar spread is an options trading strategy that involves buying options with a longer expiration date and selling options with a shorter expiration date. The goal of the strategy is to profit from a difference in the time value of the options. One way to think of a reverse calendar spread is as … Read more
A short put is a bearish strategy that involves being short (selling) a put option on a security. The purpose of the short put is to profit from a decline in the price of the underlying security below the strike price of the put option. The maximum profit for a short put is equal to … Read more
