Terry's Tips Stock Options Trading Blog

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There are no such things. Options are the best investment vehicles around. They allow investors to take long, short, or neutral positions. They allow you to manage risk far better than any other investment method. Use them wisely and they will treat you well. Options are best used as risk-reducing investment tools, not instruments for gambling. Read my article, tips and tricks for options trading trade options? Use the options Greeks to measure risk. Do not hold any position than can — in the tips and tricks for options trading case scenario — cost more than you are willing to lose.

Be careful about the number of option contracts you trade. Do not expect miracles. Not zero, just tiny. Selling naked options is less risky than buying stock. But, like stock ownership, there is considerable downside risk. The most effective way to accomplish that is to buy one option for every option you sell. That means selling spreads, rather than naked options. Hope is not a strategy. When a position goes bad, consider reducing risk. Doing nothing and hoping for a good outcome is nothing more than gambling.

Further Reading, Options Trading: Enter your email address.

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Limited risk, uncapped earnings and being paid when markets move sideways. These are just a few of the reasons trading options is so appealing to retail investors. Start here if you're new to options trading. You will learn what option contracts are, why you should trade them and understand the mechanics of what makes up option prices. Option strategies provide the flexibility to profit from rising, falling and also directionless markets. Go ahead and jump straight to the Option Scanner.

This software will show you volume spikes in contracts that often precede large price movements in stock prices. Many refer to these volume buys as being the result of inside information. You be the judge! Approximatley 29, spreads went through over only 2, in open interest. The Delta of an option does more than approximate the price move compared to the underlying; it also describes your directional bias, serves as a proxy position for the underlying instrument and estimates the probability that the option will expire in-the-money.

Delta isn't static though; it changes constantly with other pricing factors and it's important to know what they are. As options approach their expiration date, their value can erode quickly. If you're long out of the money options then this effect can be quite dramatic; you can lose money even when the market moves in the right direction. HRB Stock tanked on Wednesday the 27th after the company reported a disappointing tax season.

Outlook remains bleak for the stock and their next report is due out in June. The next day, HRB drops Trading Options for Profit Limited risk, uncapped earnings and being paid when markets move sideways.

Education Start here if you're new to options trading. Option Scanner Go ahead and jump straight to the Option Scanner. The Most Important Option Greek The Delta of an option does more than approximate the price move compared to the underlying; it also describes your directional bias, serves as a proxy position for the underlying instrument and estimates the probability that the option will expire in-the-money. Make Time Decay work for you As options approach their expiration date, their value can erode quickly.

However, it appears someone knew of the pending downward move in the stock.