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Strike prices are crucial points where an option can be exercised.
How do you pick strike prices?
1) Feeling bold? Consider In-the-Money (ITM), At-the-Money (ATM), or Out-of-the-Money (OTM) options based on your risk tolerance.
2) Prefer a balanced approach? Aim for a middle ground between risk and reward. While OTM calls offer potential big wins, they also come with higher risks.
What tips or strategies do you use?
1) Keep an eye on implied volatility (IV)...
How do you pick strike prices?
1) Feeling bold? Consider In-the-Money (ITM), At-the-Money (ATM), or Out-of-the-Money (OTM) options based on your risk tolerance.
2) Prefer a balanced approach? Aim for a middle ground between risk and reward. While OTM calls offer potential big wins, they also come with higher risks.
What tips or strategies do you use?
1) Keep an eye on implied volatility (IV)...
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Whenever im undecided to place my strike price or options strategy i will click on bootcamp for suggestions and consider. Amazingly on mobile app for convenience and ease of learning even for newbies like me. Had attached screenshots to show the various variations (too spoilt for choices) ![]()
Love using MooMoo!
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Alright, so I'm trying to wrap my head around how IV (Implied Volatility) and option prices are connected to help me out in my trading game.
Here's my notes below – i hope they're helpful.
1. What Makes Option Prices Tick
First off, we've got the Black-Scholes model, the big cheese in the option pricing world. It's got six main ingredients:
① Strike Price: That's the price agreed upon in the option contract for buying or selling the asse...
Here's my notes below – i hope they're helpful.
1. What Makes Option Prices Tick
First off, we've got the Black-Scholes model, the big cheese in the option pricing world. It's got six main ingredients:
① Strike Price: That's the price agreed upon in the option contract for buying or selling the asse...
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What options combinations can be used to bet on a range rather than just a single price?
The naked strangle strategy, simultaneously selling both call and put options with different strike prices but the same expiration date, to bet on a price range.
Next, I will first present the logic behind predicting stock prices, and then explain how to construct a naked strangle for profit.
*The following is for refe...
The naked strangle strategy, simultaneously selling both call and put options with different strike prices but the same expiration date, to bet on a price range.
Next, I will first present the logic behind predicting stock prices, and then explain how to construct a naked strangle for profit.
*The following is for refe...
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First I only like selling contracts against stocks I would like to continue to hold.
My stratigie is first to chart the underlying for support, resistance and gaps. Using those levels I try to pick a strike that is above current price a garage and generally around 10% for higher priced stocks ($50 or more) or 3-4 strikes out of the money. This way I can ensure profit from the underlying if it does exceed my expectations in a manor in which I do not mind selling. If they...
My stratigie is first to chart the underlying for support, resistance and gaps. Using those levels I try to pick a strike that is above current price a garage and generally around 10% for higher priced stocks ($50 or more) or 3-4 strikes out of the money. This way I can ensure profit from the underlying if it does exceed my expectations in a manor in which I do not mind selling. If they...
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1. Search for the most liquid contracts, i.e. those with a very small bid-ask spread. This ensures that you can get in AND out of the trade quickly at the price you choose.
2. Make sure that the duration of the contract makes sense in light of the time frame of your trade. You wouldn't want to buy a 0DTE for a pattern that took weeks to set up.
3. "Buy low, sell high" also applies to IV in the options world. If you buy contracts with a high IV rank or percentile (such as right be...
2. Make sure that the duration of the contract makes sense in light of the time frame of your trade. You wouldn't want to buy a 0DTE for a pattern that took weeks to set up.
3. "Buy low, sell high" also applies to IV in the options world. If you buy contracts with a high IV rank or percentile (such as right be...
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I used the following methods:
1) Greeks
Options traders often refer to the delta, gamma, vega, and theta of their option positions. These terms are known as the Greeks, and they provide a way to measure the sensitivity of an option's price to quantifiable factors. I determine strike price using delta which measures the sensitivity of an option's premium to a change in the price of the underlying asset.
2) Risk appetite
A relatively conservative investor (lik...
1) Greeks
Options traders often refer to the delta, gamma, vega, and theta of their option positions. These terms are known as the Greeks, and they provide a way to measure the sensitivity of an option's price to quantifiable factors. I determine strike price using delta which measures the sensitivity of an option's premium to a change in the price of the underlying asset.
2) Risk appetite
A relatively conservative investor (lik...
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I've selected an incorrect put option via margin and I have lost 900 USD in terms of margins by selling the put option. Only gained +30 USD from selling the credit margin.
Now, when a stock splits, you need to wait for the stock to be completely split and re-enter the options by using a 30-45 day expiraton date.
Now, you must be aware of all the options methods to earn weekly/daily. As I am a long-term person, I mainly focus in call options that expires long term.
Don't forget ...
Now, when a stock splits, you need to wait for the stock to be completely split and re-enter the options by using a 30-45 day expiraton date.
Now, you must be aware of all the options methods to earn weekly/daily. As I am a long-term person, I mainly focus in call options that expires long term.
Don't forget ...
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First of all, as many have noted, options is a risky game, and ultimately a zero sum game as opposed to trading stocks. The potential profits are very attractive- especially for leveraged indexes with short time limits, but unless you have a crystal ball you are likely to struggle with consistancy. I keep it safe and simple.
1. I only buy long calls that are ITM with a small bid/ask spread. obviously for companies where you identify short-immediate term strength...
1. I only buy long calls that are ITM with a small bid/ask spread. obviously for companies where you identify short-immediate term strength...
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