Search results “Valuing options at expiration”

This video introduces the five factors (Stock Price, Strike Price, Time to Expiration, Volatility of Underlying Stock, and Risk-Free Rate) that determine the value of an option.

Views: 11077
Kevin Bracker

tastytrade defines theta and decay in options pricing and explains why we establish positions with 45 days until expiration. Then, the Research Team runs a study to test the profitability and probabilities surrounding rolling positions to extend theta. Tune in for the results!
This segment is designed to show every investor the best ways to execute their trading strategy. We deliver the practical side of options trading. It's tastytrade's research broken down to a more beginner level!
======== tastytrade.com ========
tastytrade is a real financial network, producing 8 hours of live programming every weekday, Monday - Friday. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 50 original segments, and over 20 personalities, we’ll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. http://ow.ly/EbzUU
Subscribe to our YouTube channel: https://www.youtube.com/user/tastytrade1?sub_confirmation=1
Follow tastytrade:
Twitter: https://twitter.com/tastytrade
Facebook: https://www.facebook.com/tastytrade
LinkedIn: http://www.linkedin.com/company/tastytrade
Instagram: http://instagram.com/tastytrade

Views: 5055
tastytrade

Watch FULL video at http://www.MBAbullshit.com

Views: 1752
MBAbullshitDotCom

If you think this video is helpful and would like to help fund RetailHow for a cup of coffee you can click this link https://www.paypal.me/RetailHow to make a donation. Thanks for watching!
Visit us @:
Website : http://retailhow.com
YouTube: https://www.youtube.com/channel/UCZaEQlWW-Ja2ZC7mj9xhwGA
Facebook: https://www.facebook.com/retailhow
Twitter: https://twitter.com/retailhow
******************************************************
Download Links:
https://retailhow.com/product-category/downloads/
******************************************************
Related videos:
******************************************************
Videos about price tag:
How to use price tag maker - Free download
https://youtu.be/eicjYIs-8Xc
How to use item list for price tag maker - Free download
https://youtu.be/k2W7TAF46Dk
How to Create Your Own Shelf Price Labels in Access & Excel
https://youtu.be/CCPy0-bQtfM
How to create price tag
https://youtu.be/2gRp1DTjyKY
How to Create Shelf Price Labels List in Excel
https://youtu.be/sjYuKAShtGE
******************************************************
Videos about inventory:
How to count inventory using only Excel & Barcode scanner
https://youtu.be/X211r3e4tPM
How to count inventory with barcode scanner using Excel and Access
https://youtu.be/u3ltrhw7Gco
How to Create Number List with Barcode for Inventory Counting
https://youtu.be/_VNPOQwR3cw
How to manage expired items in Excel
https://youtu.be/FOIsP1BmjYI
How to create barcode in Excel using barcode font
https://youtu.be/PZfTHcl4nFM
How to create barcode in Excel using Barcode Font
https://youtu.be/dS-MKI5Awy4
******************************************************
Videos about cash:
How to make Deposit Slip in Excel for Cashier
https://youtu.be/Amx19BvZyPk

Views: 17148
retailhow

Watch FULL video Click Here: http://www.MBAbullshit.com

Views: 1334
MBAbullshitDotCom

Introduces the Black-Scholes Option Pricing Model and walks through an example of using the BS OPM to find the value of a call. Supplemental files (Standard Normal Distribution Table, BS OPM Formulas, and BS OPM Spreadsheet) are provided with links to the files in Google Documents.
tinyurl.com/Bracker-StNormTable
tinyurl.com/Bracker-BSOPM
tinyurl.com/Bracker-BSOPMspread

Views: 235245
Kevin Bracker

explain how the value of a European option is determined at expiration;

Views: 23
Ted Stephenson

What is Intrinsic value and Time Value of Financial Options?, In The Money, At The Money, Out Of The Money
Buy The Book Here: https://amzn.to/2CLG5y2
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle
The price of an option is made up of a combination of intrinsic value and time value.
The intrinsic value of an option is the value of exercising the option right now. If the price of the underlying stock is above a call option strike price, the option has a positive monetary value, and is referred to as being in-the-money. If the underlying stock is priced cheaper than the call option's strike price, the call option is referred to as being out-of-the-money. If an option is out-of-the-money at expiration, its holder simply allows the option to expire worthless. This is because a rational investor would choose to buy the underlying stock at market rather than exercise an out-of-the-money call option to buy the same stock at a higher-than-market price.
For the same reasons, a put option is in-the-money if it allows the purchase of the underlying at a market price below the strike price of the put option. A put option is out-of-the-money if the underlying's spot price is higher than the strike price.
The time value of an option is the premium a rational investor would pay over its current exercise value (intrinsic value), based on the probability it will increase in value before expiry.

Views: 86
Patrick Boyle

2017 LOS - NOT 2018 determine the value at expiration, profit, maximum profit, maximum loss, breakeven underlying price at expiration, and payoff graph of a covered call strategy and a protective put strategy, and explain the risk management application of each strategy.

Views: 36
Ted Stephenson

Factors That Impact Option Prices - Option Trading
Buy The Book Here: https://amzn.to/2CLG5y2
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle
Factors Impacting Stock Options Prices
The main factors impacting the premium price of stock options are:
• The current stock price S0
• Strike price agreed on K
• Time to maturity/expiration T
• Volatility of the stock price
• Risk-free interest rate r
• Dividends expected during option life
The Impact of Spot Prices on Option Prices
The price of the underlying is the key factor that determines the premium price of an option. The options payoff is the difference between the spot price and the strike price. The price of an option premium for a given strike price will change based on the price of the underlying stock.
Long call options are more valuable when the underlying spot price increases.
Long put options become more valuable when the underlying spot
price decreases.
Strike Price
The strike price is the contracted price that will be exchanged in the event of the exercise of the option by the option buyer. Hence strike price plays a vital role in determining the premium price of an option. The exercise price will remain the same throughout the life of an option contract and will not undergo any change, with the earlier-noted exceptions of relatively rare corporate actions such as special dividend announcements and stock splits.
Time to Maturity/Expiration
With more time, there is more uncertainty. The more time to expiration, the greater the chance that there will be fluctuation in the price of the underlying to the advantage of one of the parties to the contract. Thus, the greater the time, the higher the time value of the option. An option’s premium price is directly related to the time remaining till expiration. The buyer of an option stands to gain if the option contract finishes in the money. If there is more time to expiration, the chance of the option ending in the money is higher. As the time to expiration of an options contract passes, the value of the option erodes.
If an investor buys an option that is one year away from expiration, it will obviously be more expensive than a similar option that is only five minutes away from expiration. All options exhibit time decay and are wasting assets.
The Volatility of the Stock Price
The volatility of a stock price is a measure of how uncertain we are about future stock price movements. The standard deviation of the historical price movements of the underlying asset over a defined period of time is typically used to measure the volatility of that asset. The higher the volatility is, the more likely it is that an asset’s price will move up or down a lot. Thus, an option on a volatile asset is worth more than an option on an asset with little volatility. If a market becomes more volatile, the premium for option contracts, both puts and calls, would go up. Someone who bought options earlier would benefit if market volatility increases to the detriment of the person who sold the options to them.
Interest Rates
The cost of carry depends on the risk-free rate of interest in the market concerned. The higher the interest rate, the higher the call option price and lower the put option price. The lower the interest rate, the lower the call option price and higher the put option price.
Higher interest rates have two impacts on stock options valuations:
1. Higher expected return on stock
2. The present value of future cash flows of an option decrease
If all else is kept equal, an increase in interest rates increases call prices and decreases put prices.
Expected Dividends
Stock dividends are paid only to the holder of the underlying security on the record date. Owners of call options on the same underlying stock are not eligible to receive dividends. Dividends paid during the life of an options contract reduce the price of the underlying. This has to be reflected in the price of options.
An announcement of a new dividend or an increase in the dividend of an underlying stock reduces pre-existing market call prices and increases pre-existing market put prices. A surprise announcement of a reduction in a stock’s dividends has the effect of increasing pre-existing market call prices and decreasing pre-existing market put prices.

Views: 142
Patrick Boyle

A look at how to determine which option expiration month you should consider buying when purchasing a long call or put. For more information visit www.tradesmartu.com

Views: 1974
TradeSmart University

2017 LOS - NOT 2018 determine the value at expiration, the profit, maximum profit, maximum loss, breakeven underlying price at expiration, and payoff graph of the strategies of buying and selling calls and puts and determine the potential outcomes for investors using these strategies;

Views: 9
Ted Stephenson

Jay Harris shows one way to check the value of your options prior to expiration...

Views: 258
Tom Gentile

MIT 18.S096 Topics in Mathematics with Applications in Finance, Fall 2013
View the complete course: http://ocw.mit.edu/18-S096F13
Instructor: Stephen Blythe
This guest lecture focuses on option price and probability duality.
License: Creative Commons BY-NC-SA
More information at http://ocw.mit.edu/terms
More courses at http://ocw.mit.edu

Views: 42326
MIT OpenCourseWare

An introduction into option pricing. Understanding how option pricing works and the components that determine an option price. For more information visit www.tradesmartu.com

Views: 19260
TradeSmart University

Expiration handling enables you to define how in-the-money options are treated as they reach expiration.

Views: 2451
Quantcha

http://bit.ly/tradingoptionslive Upgrade your trading skills today! Take BONUS Training Now! (Access available for the next 48-hours only)
Website: https://www.tradingoptionslive.com
LIVE Trading Videos:
https://youtu.be/yQl_yr7rgrc
https://youtu.be/Du_swi23aFI
https://youtu.be/kUWgcNLgoLw
Trading Courses:
STEP 1: http://bit.ly/chartdivergences (Learn to recognize divergencies for identifying stock moves before they happen! Make charts your best friends! 6 plus hours of Proprietary Content Focusing on How to discover Divergencies utilizing charts and patterns to identify major stocks and market moves before they actually take place!)
Step 2: http://bit.ly/watchlistrockstar Not all stocks are good for options trading. Over the years, we have compiled over 300+ stocks that are not only good but perfect for trading options - Get Your Winning Watchlist Today ~
Step 3: http://bit.ly/13MarketMoves Learn when is the BEST TIME to TRADE - Learn more about our proprietary options trading strategy - the 13 Market Moves Formula: It’s Not just about recognizing the best days to trade, but knowing when NOT to trade! Find out on which days to trade with small positions and on which days to increase your positions when probability is highly in your favor. Learn this 13 Market Moves Formula that will give you the skills to read the markets next move buy observing and calculating probabilities of sequences of these market moves BEFORE the next market move happens! This is an advanced Day Trading and Swing Trading Course unlike anything else you will find anywhere!)
Step 4: http://bit.ly/marketmovesdaily Subscribe to our exclusive DAILY 13 MARKET MOVES ANALYSIS, TOP TRADING IDEAS OF THE DAY, EARNINGS PLAYS AND MUCH MUCH MORE!!! So that you can take your 13 Market Moves Knowledge and Application of formula to the next level!!!
Step 5: http://bit.ly/tradelikearockstar Are you tired of mediocre trades, would you like to learn how to trade like a ROCKSTAR?! In this advanced course you will learn how to make the most of your WINNING WATCHLIST AND GENERATE TOP TRADING IDEAS ON YOUR OWN!! You will gain in depth understanding of Key Behavioral Patterns, TOP CORRELATION PLAYS IDENTIFY BEST TRADES DURING EACH EARNINGS SEASON AND MUCH MUCH MORE!!! Over 5 hours of LIVE Trading Seminar.
Step 6: http://bit.ly/highrollerstradingclub If you are ready to level up your game - Join our exclusive High Rollers Club
http://bit.ly/coursebundle-bootcamp
LOOKING FOR THE BEST VALUE?! EXCLUSIVE OFFER: ADD extra $1500 to your trading account by learning the entire program in accelerated way by taking advantage of our Mega Course Bundle (BootCamp) - Get all 3 courses (Charts Divergences + 13 Market Moves + Trade Like A Rockstar)
Note: These steps are the IDEAL path to take to gain full advantage of what we are trying to offer - which is upgrading your trading skills so you can help you upgrade your lifestyle!!

Views: 2242
TradingOptions LIVE

Today we will learn about put call parity and how does it work?
Buy The Book Here: https://amzn.to/2CLG5y2
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle
What is Put-Call Parity
Put-call parity is a no arbitrage principle that specifies the relationship between the price of European put options and European call options, with the same underlying asset, strike price and expiration date. Put-call parity states that simultaneously holding a short European put and long European call of the same class will deliver the same return as holding one forward (or futures) contract on the same underlying asset, with the same expiration, and a forward price equal to the option's strike price. If the prices of the put and call options diverge so that this relationship does not hold, an arbitrage opportunity would exist, meaning that arbitrage traders would be able to earn a risk-free profit. Such opportunities are uncommon and short-lived in liquid markets.
The equation expressing put-call parity is:
C + PV(x) = P + S
where:
C = price of the European call option
PV(x) = the present value of the strike price (x), discounted from the value on the expiration date at the risk-free rate
P = price of the European put
S = spot price or the current market value of the underlying asset
Put-call parity applies only to European options, which can only be exercised on the expiration date, and not American options, which can be exercised before.
Watch Patrick's other videos on covered calls and protective puts to better understand this concept.
Covered Call Video: https://www.youtube.com/watch?v=UlC9iM2Wh7I
Protective Put Video: https://www.youtube.com/watch?v=MUs4jga-NAI&t=26s
What is Put Call Parity? How does it work? put call parity formula

Views: 122
Patrick Boyle

Buy The Book Here: https://amzn.to/2CLG5y2
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle
In finance, the binomial options pricing model provides a generalizable numerical method for the valuation of options. The binomial model was first proposed by Cox, Ross and Rubinstein in 1979, six years after the Black Scholes model. Essentially, the model uses a "discrete-time" (lattice based) model of the varying price over time of the underlying financial instrument.
The Binomial options pricing model approach has been widely used since it is able to handle a variety of conditions for which other models cannot easily be applied. This is largely because the model is based on a description of an underlying instrument over a period of time rather than a single point in time. As a consequence, it is used to value American options that are exercisable at any time in a given interval as well as Bermudan options that are exercisable at specific instances of time. Being relatively simple, the model is readily implementable in computer software or even in spreadsheets like Excel.
Although computationally slower than the Black–Scholes formula, it is more accurate, particularly for longer-dated options on securities with dividend payments. For these reasons, various versions of the binomial model are widely used by practitioners in the options markets.
The Risk-Neutral Binomial Tree Approach
The concept of a portfolio made up of some portion of stock and some portion of a derivative on that stock gives rise to the ability to generate equivalent cash flows at end nodes of binomial trees, and this certainty of cash flows allows us to discount the cash flows at the risk-free rate. The ability to discount cash flows in the future at a known risk-free rate gives us the concept of risk-neutral valuation.
Risk neutral valuation is a powerful concept in derivatives pricing which enables valuation of assets based on their expected payoffs at different points in time and with different scenarios of underlying asset price movements.
Risk-neutral valuation is applicable whenever you can create a portfolio including the underlying plus a derivative on the same underlying. It cannot be extrapolated to find the value of derivatives on other underlyings. It relies on the portfolio instruments having a level of dependency on one another.
This model is very flexible and powerful because we don’t need to know the real probability of the upside scenario, or the real likelihood of the downside economic scenario—it is not required to maintain our certainty of cash flows at the end point.
An easy mistake to make is to confuse this constructed probability distribution with real-world probability. They will be different, but the method of risk-neutral pricing is, like many other useful computational tools, convenient and powerful. The approach of risk-neutral valuation makes sense for valuation purposes but only works when all of the instruments included in the valuation model depend on the same underlying and thus are exposed to the same risks, though held in different proportions. We are pricing the option in terms of the underlying stock, thus risk preferences are taken into account in the pricing of the underlying.
The risk-neutral binomial tree approach is mathematically equivalent to the portfolio approach previously covered, and gives us the exact same valuation. The risk neutral binomial tree valuation approach to value the derivative, f, is as follows.
With some algebra, you can show that the risk-neutral formula is mathematically equivalent to the portfolio approach where of shares is calculated to generate riskless outcomes at maturity, T.
Although we are not making any assumptions about the probabilities of the returns on the underlying, the element p in this formula can be interpreted as the “risk-neutral probability of an up move” and 1–p as the “risk-neutral probability of a down move.”
The value today of the derivative, f, can thus be read as the present value of the derivative at the up node times the risk-neutral probability of an up move plus the value of the derivative at the down node times the risk-neutral probability of a down move.
In our prior example of an underlying that has a price of $50, where we know at the end of three months that the underlying will be at one of two prices (either $70 or $30), we will price a European Call with a strike of $50, and one month to expiration and a risk-free interest rate of 5%.
Here p = 0.5052 based on the above formula where p is a function of the risk free rate and time to maturity T, as well as u and d. Then the call value at time zero is f = e(-rT)x[pfu] = $10.0624, the same as in the portfolio valuation approach above.
#Risk Neutral Valuation Approach

Views: 176
Patrick Boyle

Learn more about the terms used to describe the value of an option, including time until expiration, time value, intrinsic value, and moneyness.
Subscribe: https://www.youtube.com/subscription_center?add_user=cmegroup
Learn more: https://institute.cmegroup.com/
CME Group: http://www.cmegroup.com/
Follow us:
Twitter: http://twitter.com/CMEGroup
Facebook: http://www.facebook.com/CMEGroup
Topic: in the money, at the money, out of the money, option value

Views: 279
CME Group

Financial Options Pricing History. Today we will learn How do Investors Price Options?
Buy The Book Here: https://amzn.to/2CLG5y2
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle
Up to now we have looked at how options work and how they can be combined. We have mentioned options premium and how it is made up of time value and intrinsic value. In this video we will look at a few of the most common methods for pricing options. The value of options depends on a number of different variables in addition to the value of the underlying asset. They are complex to value and there are many pricing models in use. All models essentially incorporate the concepts of rational pricing, intrinsic value, time value, and put-call parity.
In this video we will give you some insight as to how different variables affect option prices, and we hope to show you that while these methods are extremely useful, they are quite fallible, and can only give you an indication of fair value that is extremely dependent on the inputs into the formulas. The old “garbage in, garbage out” adage is particularly applicable to derivatives valuation—and most of financial mathematics. The formulas we will look at are only as good as the numbers that are put into them and often rely on a number of assumptions that do not always hold up in live securities market trading. They all rely on an estimate of volatility, and on an assumed distribution, that cannot be known in advance.
In general, standard option valuation models depend on the following factors:
• The current market price of the underlying security
• The strike price of the option
• The cost of holding a position in the underlying security, including interest and dividends
• The time to expiration together with any restrictions on when exercise may occur
• An estimate of the future volatility of the underlying security’s price over the life of the option.
Options, or option-like contracts have been around for hundreds of years. Only in the 1970s was a formal pricing model introduced..
Options contracts are very similar to insurance contracts, and so most of the ideas used to price them came from the insurance business. As early as 1350 in Palermo, insurance contracts were common for casualty and credit risks relating to shipping. The two kinds of insurance were often being written separately. A popular contract was a conditional sale (similar to a put option) where the insurer agreed to purchase ship or cargo if it failed to arrive.
Louis Bachelier (1870–1946) was a French mathematician credited with being the first person to model the stochastic process now called Brownian motion, which was part of his PhD thesis “The Theory of Speculation,” published in 1900. His thesis, which discussed the use of Brownian motion to evaluate stock options, is historically the first paper to use advanced mathematics in the study of finance. Thus, Bachelier is considered a pioneer in the study of financial mathematics and stochastic processes. Bachelier’s thesis was not well received because it attempted to apply mathematics to an unfamiliar area for mathematicians.
We know the fair value of an options contract at expiration based upon the payoff diagrams, and we know that options are worth more than their value at expiration before the expiration date due to time value.
Option value = Intrinsic value + Time value
Before mathematical formulas existed for pricing options we knew that the fair value of options was higher than intrinsic value, as there was still time for the underlying to move in your favor, but not how much higher the price should be. Option prices, like all market prices, were just a capital weighted average of every market participant’s best guess as to what fair value should be. Should an investor feel that option prices were too high, they could simply sell some options, and this would push the price down to where other investors felt they were too cheap and thus were willing to buy them.
Tune in tomorrow for Patricks Video on the Binomial Tree approach for pricing options.

Views: 146
Patrick Boyle

NewsChannel 15's Rachel Russell reports.

Views: 1259
WANE 15 News

How to Trade Options – Free (Video) Training My Top 5 Chart Patterns www.powercycletrading.com/5chart
Option Trading Veteran and Power Cycle Trading® Founder Larry Gaines covers the basics of how to trade options in this options basics series. Gaines explains the importance of time value for options trading. The intrinsic value of a stock option is the premium a rational investor would pay over its current exercise value. The exercise value is the intrinsic value. When first learning how to trade options, the time value concept is one of the most important elements for understanding options. The time curve showing the decay of options is a great tool for options trading.
=========================================
IMPORTANT Disclaimer: The contents of this video all products of Power Cycle Trading® are for educational purposes only and are NOT intended as financial advice nor exact demonstration of actual trades. You should always consult your financial professional before investing. No representation is being made that the use of this strategy or any system or trading methodology will generate profits. Past performance is not necessarily indicative of future results. There is substantial risk of loss associated with trading securities and options on equities. Only risk capital should be used to trade. Trading securities is not suitable for everyone. Futures, Options, and Currency trading all have large potential rewards, but they also have large potential risk. ===============================================
Help me level the playing field between Wall Street and individual traders by:
1. Liking This Video
2. Subscribing to my Channel here: https://www.youtube.com/channel/UCWY2Sx1FU0xTit_3UDlZRIA?sub_confirmation
3. Share this video link on your social media channels =============================================== Connect with me here, too: http://powercycletrading.com
Here’s More about Power Cycle Trading: http://powercycletrading.com/about/
===============
More recommended videos on how to trade options:
How to Make Money Trading Options - The Vertical Spread with Sky View Trading
https://www.youtube.com/watch?v=6_0SbRaHv1U&t=189s
How to Trade Options: A Beginners Introduction to Trading Stock Options by ChartGuys.com
https://www.youtube.com/watch?v=SB2viufbLEM&t=7s
How to trade stock options for beginners by TheBrownReport
https://www.youtube.com/watch?v=D__itHY7h7Q
===========================================
Watch My Option Butterfly Spread NVDA Lesson- https://www.youtube.com/watch?v=5kDY5sxKWRs ___________________________________________________
Thanks for visiting the Power Cycle Trading® YouTube channel. We really appreciate you watching. All the Best, Larry Gaines - Founder Power Cycle Trading® Premiere Option Trading Education
https://youtu.be/3a7_-SwNaiQ

Views: 183
Power Cycle Trading

http://www.OptionSIZZLE.com
Buying Options Vs. Selling Options -- Which Is Better?
One of the first things many new options traders are taught is that more than 60% of all options expire worthless.
This statistic, which never had hard research behind it, is usually meant to instill a sense of caution in new and versed traders.
VISIT OptionSIZZLE.com FOR OUR 5 STEP FORMULA TO MORE PROFITABLE OPTION TRADES
http://www.OptionSIZZLE.com
SUBSCRIBE TO THE YOUTUBE CHANNEL!
http://www.youtube.com/subscription_center?add_user=optionsizzle
LET'S CONNECT!
Facebook ► http://facebook.com/optionsizzle
Twitter ► http://twitter.com/optionsizzle
OptionSIZZLE ► http://www.optionsizzle.com
Google+ ► http://gplus.to/optionsizzle
Understanding this statistic can help you understand the importance of trade timing on entries and exits.
The strategies of new traders tend to focus on long positions and buying options.
They often fail to capture the profitable opportunities available using other strategies that involve being an option seller, or short an option, to collect premium.
Being an option seller is somewhat different than shorting a stock.
When shorting a stock, you expect shares to move lower and only profit if that happens.
When selling an option. there are a number of ways to make a profit.
You could sell a call against stock to collect premium, sell a put to collect premium with the intent to own shares of the underlying at a discount if prices do drop lower, or just sell a credit spread looking for prices to hold a level because you are not sure of direction.
I came across a report created by Dr. John Summa which sheds some light on the subject of who actually wins more often in options.
Is it the buyer or the seller of options?
Despite the report and research being dated thirteen years, I still find the information very relevant and informative to option traders today.
In his study, Dr. Summa finds that time and time again, regardless of market direction, the sellers of options have the advantage over the buyers.
Think of it like this; if more than 60% of options expire worthless, and less than 40% of options expire with some value, then don't you think you would rather be on the sell side of the equation?
It is important to note that in his study, Dr. Summa is referring to the ratio of options held to expiration that expire worthless.
He does not include all the options contracts that are closed for a lower price than they were opened.
To get the rest of the article go to
http://www.OptionSIZZLE.com
Also, let me know your thoughts on the subject and have you had success with selling options.

Views: 42277
OptionSIZZLE

Discord: https://discord.gg/9T6QgVC
Join Robinhood and get a free share of stock (like Apple or Microsoft) using this link: http://share.robinhood.com/adaml496
At 1:38 I say "$14", I meant to say "$14 per share"
The strike price of a call option is what you can buy each of those 100 shares for, not what you can buy all of them for
I made a mistake when talking about puts: puts do not have infinite profit potential since a stock's price can not be less than zero. It is capped.
I'm all about making quality, useful content for you guys and your support allows me to continue to do so with increasing production quality. Thank you!
In this video, we take a look at the very basics of how to trade equity options on Robinhood for people using the app for investing. If you use a different brokerage, this video will still explain options well enough to be applicable for you. This is geared toward beginners, and will help you get a broader picture of how options work. Please suggest ideas for future videos! PLEASE SEE BELOW FOR SOME SMALL CORRECTIONS.
01:02 - Basics of call options
03:35 - Summary of OTM, ATM, ITM
04:45 - Option premium
07:40 - Breakeven
09:54 - Expiration & Theta
13:48 - Implied Volatility
17:45 - Long call max P/L
19:55 - Options profit calculator
24:30 - Buying puts
26:40 - Long put max P/L
27:40 - Buying OTM vs ITM
Options are a type of financial derivative, meaning that their value is derived from another security (in this case, stocks). An option's value is contingent on time until expiration, volatility of the underlying stock, and closeness/deepness of being ITM. Stock options can provide amazing (and sometimes devastating) leverage, so please use carefully. Options can also be used as a hedging tool.
There are many strategies that options can be used for such as vertical spreads, calendar spreads, Iron condors, Jaded Lizards, etc. Each strategy has a unique goal and can be altered and tweaked to a very fine degree.
Options are provided by most brokerages, and usually require approval from the brokerage. In Robinhood, you can apply for options trading in settings. In order to enter more complicated trades like the ones mentioned above, you need to be approved for options level 3 in settings. Options level 2 will allow you to simply buy calls and puts. Most strategies involve both buying and selling short calls and puts. To be approved, you must apply in the Robinhood app settings.
Robinhood no longer allows entering box spreads. Google /u/1R0NYMAN to see why. He is also a great example of how options can inflict tremendous harm on the trader if not used properly. If you're not sure about any aspect of a trade, then do not enter the trade. It is important to know all that you can about any given trade to prevent blowing up your account or getting margin called.

Views: 193181
InTheMoney

Exercising Options - How and why do you exercise an options contract? Put Options and Call options
Buy The Book Here: https://amzn.to/2CLG5y2
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle
Exercising Options
Calls and put options give the owner the right to buy or sell a stock at a certain price by a certain date. When the owner of that call or put option has an option that is "in-the-money" and decides to buy or sell the stock, it is said that they are "exercising" their option. However, just because an option is "in-the-money" it doesn't mean that it is always in the best interest of the option holder to exercise it. Most of the time the option owner is better off to just sell the option at the current market price. This is because the option price is usually higher than the "intrinsic value", or the amount the option is actually "in-the-money." At expiration date, it usually makes sense to exercise the option.
When to Exercise a Call Option
If you own a call option and the stock price is HIGHER than the strike price at expiration, then it makes sense for you to exercise your call. This way you can buy the stock at a lower price and immediately sell it in the market at the higher price.
When to Exercise a Put Option
If you own a put option and the stock price is LOWER than the strike price at expiration, then it makes sense for you to exercise your put. This way you can sell the stock at a higher price and immediately buy it back at the lower price.
I will do another video shortly on when it is optimal to early exercise options.
Trading options.

Views: 77
Patrick Boyle

Buy The Book Here: https://amzn.to/2CLG5y2
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle
What is Options Theta?
An option's theta is a measurement of the option's time decay. The theta measures the rate at which options lose their value as the expiration date draws nearer. Theta is generally expressed as a negative number, the theta of an option reflects the amount by which the option's value will decrease every day.
An Example
A call option with a current price of $2 and a theta of -0.05 will experience a drop in price of $0.05 per day. So in two days' time, the price of the option should fall to $1.90.
Time to Expiration and its Effects on Theta
Longer term options have theta of almost 0 as they do not lose value on a daily basis. Theta is higher for shorter term options, especially at-the-money options. This is pretty obvious as such options have the highest time value and thus have more premium to lose each day.
Conversely, theta goes up dramatically as options near expiration as time decay is at its greatest during that period.
Changes in Volatility and its Effects on Theta
In general, options of high volatility stocks have higher theta than low volatility stocks. This is because the time value premium on these options are higher and so they have more to lose per day.
what is delta gamma theta vega in options

Views: 45
Patrick Boyle

Buy The Book Here: https://amzn.to/2CLG5y2
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle
This is the fifth video in our series on pricing options. The whole series is collected as a playlist here: https://www.youtube.com/watch?v=LHaftRA2N8A&list=PLHC72UlhAthDq-s_jRepKDrsaeGDU3PaJ
If you are new to options pricing and binomial trees it might make sense to watch some of the other videos first.
Binomial Trees and American Options
American options can be exercised anytime up to maturity, as opposed to European options which can only be exercised at maturity. Binomial trees can be used to price American options with the only modification needed is to evaluate at each node as to whether there is more value associated with exercising or holding the option to expiration. The highest of these two values is used in calculating the option value.
In the two-step American binomial tree valuation shown in this video, we are using the same example as in our last video but with the option now American. In this case, at T1 it would be optimal to early-exercise. Thus the valuation at the first down node is in fact the early-exercise valuation, which is the intrinsic value at that node, as opposed to the valuation achieved from the risk-neutral valuation for fd. At time zero, the valuation of the derivative is based on fu as usual, but the fd value input into the formula for f is the early exercise cash flow.
To watch the video where we priced the same put option, but as a European option, click here. https://www.youtube.com/watch?v=nN4tOYVqf9o
Pricing American Options using the Binomial Tree Method
multi step binomial trees

Views: 147
Patrick Boyle

Why Option Buyers Lose Money is an unknown mystery. As i shared in my option chain analysis series that option writers or option sellers are always correct. In 80% to 90% of cases, option buyers lose money. Which in turn is the success rate of option sellers. In this video, we will discuss 7 reasons or mistakes Why Option Buyers Lose Money?
1. The key to success for option buyers is to track the activities of the option writers i.e. how they are taking a position in the derivatives segment. The reason being, the loss of option buyers is limited whereas the losses of option writers are unlimited.
2. Option buyers think that if they buy deep OTM or out of the money option then their loss will be less because it is cheap. However, the option premium is directly proportional to the probability of hitting the strike price.
3. Option buy can be profitable in the highly volatile market that can be checked with the help of India VIX.
4. The best time to trade derivatives or options is between 1st and 3rd week i.e. before the expiry week. By doing this, an investor can avoid the loss due to time value decay.
5. Option buyers should put stop loss to minimize the loss.
6. With the help of technical analysis, you can find out whether the option is overpriced or underpriced.
7. There is no alternative to learning. Option buyers should gain knowledge of how derivatives segment work then only they can do perfect option chain analysis.
If you liked this video, You can "Subscribe" to my YouTube Channel. The link is as follows
https://goo.gl/nsh0Oh
By subscribing, You can daily watch a new Educational and Informative video in your own Hindi language.
For more such interesting and informative content, join me at:
Website: http://www.nitinbhatia.in/
T: http://twitter.com/nitinbhatia121
G+: https://plus.google.com/+NitinBhatia
#NitinBhatia

Views: 205290
Nitin Bhatia

www.skyviewtrading.com
Options are priced based on three elements of the underlying stock.
1. Time
2. Price
3. Volatility
Watch this video to fully understand each of these three elements that make up option prices.
Adam Thomas
www.skyviewtrading.com
what are options
option pricing
how to trade options
option trading basics
options explanation
stock options

Views: 1289140
Sky View Trading

Buy The Book Here: https://amzn.to/2CLG5y2
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle
People are often confused as to when it makes sense to exercise an option. Most of the time it does not make sense to early exercise American options. In this video we go through the scenarios where it might make sense.
For an American-style call option, early exercise is a possibility whenever the benefits of being long the underlying outweighs the cost of giving up the option early (the benefits of being long the underlying outweigh the foregone time value of the option). For example, on the day before an ex-dividend date, it may make sense to exercise an equity call option early in order to collect the dividend. In general, equity call options should only be exercised early on the day before an ex-dividend date, and then only for deep in-the-money options when the dividend is sufficiently large
For an American-style put option, early exercise might make sense if it is deep in-the-money. In this case, it may be wise to exercise the option early in order to obtain the intrinsic value (K – S) earlier so that it can start to earn interest immediately. This is somewhat more likely to be worthwhile if there is no ex-dividend date, which would probably cause the price of the underlying to fall further between now and the expiry date. This would usually require interest rates to be relatively high.
When should I exercise an option?

Views: 134
Patrick Boyle

Join us in the discussion on InformedTrades:
http://www.informedtrades.com/1087607-black-scholes-n-d2-explained.html
In this video, I give a general overview of the Black Scholes formula, and then break down N(d2) in detail. I cover most of the entire formula in this video.
My goal is to describe Black Scholes in a simple, easy to understand way that has never been done before. Because this parts of the formula are somewhat complicated, I repeat parts several times during this video.
See our other videos on Black Scholes: http://www.informedtrades.com/tags/black%20scholes/
Practice trading options with a free options trading demo account: http://bit.ly/apextrader

Views: 140080
InformedTrades

Why we pick certain strikes to buy or sell options

Views: 4
Kim Kromas

Lecturer: Prof. Shimon Benninga
We show how to price Asian and barrier options using MC. A starting point is an extended example of how to use MC to price plain vanilla calls. This example illustrates the basic principles of MC pricing for options.

Views: 46762
TAUVOD

A mini trading tutorial from Options A to Z.com, the website dedicated to teaching investors the art & science of options trading. In this video, we'll show you how to use the "expected price calculator" in Think or Swim (TOS).

Views: 10787
optionsatoz

http://www.learn-stock-options-trading.com a brief summary of option value and what makes up an options price.
Related text lessons to go with those videos:
http://www.learn-stock-options-trading.com/option-value.html
Also, be sure to check out our channel:
http://www.youtube.com/user/optionstradingmentor

Views: 3827
Trader Travis

Nightly Watchlist/main channel: https://www.youtube.com/watch?v=9UbgeiBlxpE
Support the stream / Add to the YOLO Bucket: https://streamlabs.com/thestockmarket
STOCK TRADING BOOTCAMP & CHATROOM! (THE LINK SAYS REAL ESTATE BUT ITS STOCKS): https://www.ttfrealestate.com/p/free-stock-trading-bootcamp
The stock market is closed today for good Friday. Happy holidays too! Since I already allocate my time during the weekdays for the markets, I am still going to be free during the normal trading hours. That gave me the crazy idea to still stream all day, except today instead of live trading, we are going to do a live lesson. I will start an hour into the stream and will do a several + hour lesson on how to trade options and option trading for beginners. I know a lot of you are at various skill levels so we will be covering both beginner and advanced concepts, and talk about trading strategies like how to find the best stocks to trade. You won't want to miss this but even if you do, you can watch the recording after. Please come and ask questions, if you guys make this interactive this can be a great learning tool for everybody!
What we are going to cover:
What is an option
Basics of a stock and option trading basics
how much to start trading with
how to make money trading options
small account strategies for options
what is a put
what is a call
expiration dates
option pricing
risk management
& a bunch more I am not remembering and whatever else you guys bring the discussion too!
This is all live and in real-time, feel free to ask any questions about trading. If I don't answer it is probably because I am in my zone trading given the current market environment, I will get to your question whenever I have an opportunity. Good luck trading and understand this stream is for educational purposes. Do not copy the trades. Option trading is really risky and you are more than likely going to lose your money copying anything you see on this stream or channel. Consult with a professional before making any financial investment.
Trading on 4 different platforms: Etrade pro (screen shown), tastyworks (also shown), Robinhood options (progress on main channel), and my main portfolio.
Join our REDDIT! http://www.reddit.com/r/TheTradingFraternity
FULL REAL ESTATE COURSE (STOCK COURSE INCLUDED): http://www.ttfrealestate.com
Get your Tastyworks Account here: https://start.tastyworks.com/#/login?referralCode=GZEBKSA4BX
How to start trading options with a small account: https://www.youtube.com/watch?v=hLYTHQBgOW8
SUBSCRIBE TO THE CHANNEL FOR DAILY STOCK MARKET NEWS, UPDATES & TRADING TUTORIALS
#StockMarket #Stocks #Investing
FOLLOW ON BOTH
http://www.instagram.com/thetradingfraternity
http://www.facebook.com/TradingFraternity
DISCLAIMER: These videos are for educational purposes only. Nothing in this video should be construed as financial advice or a recommendation to buy or sell any sort of security or investment. Consult with a professional financial adviser before making any financial decisions. Investing in general and options trading especially is risky and has the potential for one to lose most or all of their initial investment

Views: 1756
Stock Market Live

The binomial solves for the price of an option by creating a riskless portfolio. For more financial risk videos, visit our website! http://www.bionicturtle.com

Views: 145733
Bionic Turtle

Kevin Matras talks about intrinsic value and time value and what you need to know before your next options trade.

Views: 549
ZacksInvestmentNews

What are Call Options?
Learn more at: https://www.wallstreetsurvivor.com
Call Options are contracts to buy an underlying asset (stock, house, anything) for a certain price by a certain date. If you are new to options or to the stock market, this video is the perfect place to start.
Practice trading options for free at http://www.wallstreetsurvivor.com/stock-market-game

Views: 26292
Wall Street Survivor

http://bit.ly/tradingoptionslive Upgrade your trading skills today! Take BONUS Training Now! (Access available for the next 48-hours only)
Website: https://www.tradingoptionslive.com
LIVE Trading Videos:
https://youtu.be/yQl_yr7rgrc
https://youtu.be/Du_swi23aFI
https://youtu.be/kUWgcNLgoLw
Trading Courses:
STEP 1: http://bit.ly/chartdivergences (Learn to recognize divergencies for identifying stock moves before they happen! Make charts your best friends! 6 plus hours of Proprietary Content Focusing on How to discover Divergencies utilizing charts and patterns to identify major stocks and market moves before they actually take place!)
Step 2: http://bit.ly/watchlistrockstar Not all stocks are good for options trading. Over the years, we have compiled over 300+ stocks that are not only good but perfect for trading options - Get Your Winning Watchlist Today ~
Step 3: http://bit.ly/13MarketMoves Learn when is the BEST TIME to TRADE - Learn more about our proprietary options trading strategy - the 13 Market Moves Formula: It’s Not just about recognizing the best days to trade, but knowing when NOT to trade! Find out on which days to trade with small positions and on which days to increase your positions when probability is highly in your favor. Learn this 13 Market Moves Formula that will give you the skills to read the markets next move buy observing and calculating probabilities of sequences of these market moves BEFORE the next market move happens! This is an advanced Day Trading and Swing Trading Course unlike anything else you will find anywhere!)
Step 4: http://bit.ly/marketmovesdaily Subscribe to our exclusive DAILY 13 MARKET MOVES ANALYSIS, TOP TRADING IDEAS OF THE DAY, EARNINGS PLAYS AND MUCH MUCH MORE!!! So that you can take your 13 Market Moves Knowledge and Application of formula to the next level!!!
Step 5: http://bit.ly/tradelikearockstar Are you tired of mediocre trades, would you like to learn how to trade like a ROCKSTAR?! In this advanced course you will learn how to make the most of your WINNING WATCHLIST AND GENERATE TOP TRADING IDEAS ON YOUR OWN!! You will gain in depth understanding of Key Behavioral Patterns, TOP CORRELATION PLAYS IDENTIFY BEST TRADES DURING EACH EARNINGS SEASON AND MUCH MUCH MORE!!! Over 5 hours of LIVE Trading Seminar.
Step 6: http://bit.ly/highrollerstradingclub If you are ready to level up your game - Join our exclusive High Rollers Club
http://bit.ly/coursebundle-bootcamp
LOOKING FOR THE BEST VALUE?! EXCLUSIVE OFFER: ADD extra $1500 to your trading account by learning the entire program in accelerated way by taking advantage of our Mega Course Bundle (BootCamp) - Get all 3 courses (Charts Divergences + 13 Market Moves + Trade Like A Rockstar)
Note: These steps are the IDEAL path to take to gain full advantage of what we are trying to offer - which is upgrading your trading skills so you can help you upgrade your lifestyle!!

Views: 14386
TradingOptions LIVE

In finance, an option is a contract which gives the buyer (the owner or holder of the option) the right, but not the obligation, to buy or sell an underlying asset or instrument at a specific strike price on a specified date, depending on the form of the option. The strike price may be set by reference to the spot price (market price) of the underlying security or commodity on the day an option is taken out, or it may be fixed at a discount in a premium. The seller has the corresponding obligation to fulfill the transaction—to sell or buy—if the buyer (owner) "exercises" the option. An option that conveys to the owner the right to buy at a specific price is referred to as a call; an option that conveys the right of the owner to sell at a specific price is referred to as a put. Both are commonly used in and by the old traded, but the call option is more frequently discussed.
The seller may grant an option to a buyer as part of another transaction, such as a share issue or as part of an employee incentive scheme, otherwise a buyer would pay a premium to the seller for the option. A call option would normally be exercised only when the strike price is below the market value of the underlying asset, while a put option would normally be exercised only when the strike price is above the market value. When an option is exercised, the cost to the buyer of the asset acquired is the strike price plus the premium, if any. When the option expiration date passes without the option being exercised, then the option expires and the buyer would forfeit the premium to the seller. In any case, the premium is income to the seller, and normally a capital loss to the buyer.
The owner of an option may on-sell the option to a third party in a secondary market, in either an over-the-counter transaction or on an options exchange, depending on the option. The market price of an American-style option normally closely follows that of the underlying stock, being the difference between the market price of the stock and the strike price of the option. The actual market price of the option may vary depending on a number of factors, such as a significant option holder may need to sell the option as the expiry date is approaching and does not have the financial resources to exercise the option, or a buyer in the market is trying to amass a large option holding. The ownership of an option does not generally entitle the holder to any rights associated with the underlying asset, such as voting rights or any income from the underlying asset, such as a dividend.
Options contracts have been known for decades. The Chicago Board Options Exchange was established in 1973, which set up a regime using standardized forms and terms and trade through a guaranteed clearing house. Trading activity and academic interest has increased since then.
Today, many options are created in a standardized form and traded through clearing houses on regulated options exchanges, while other over-the-counter options are written as bilateral, customized contracts between a single buyer and seller, one or both of which may be a dealer or market-maker. Options are part of a larger class of financial instruments known as derivative products, or simply, derivatives.

Views: 131
Kevin Joprola

We hit the MOTHER LOAD!! we found CASES of Brand New candy from Party City... UN-EXPIRED!! This score was a blessing, and now we have to figure out what to do with 180 pounds of CANDY lmao :)
If you want to order ANYTHING you see on our episodes, please EMAIL us and send us an offer! Be sure to include your Paypal address, so that we can send you an invoice for your purchase!
EMAIL US! [email protected]
SUPPORT THE SHOW!
THROUGH PAYPAL: [email protected]
PATREON: https://www.patreon.com/user?u=5923264
GOFUNDME: https://www.gofundme.com/Van4ChrisAndHollieShow
PO BOX LETTERS OR GIFTS can be sent to: Chris and Hollie/ PO box 153/ Knotts island NC/ 27950

Views: 20632
TheChris AndHollieShow

http://ExpertOptionTrading.com/videos
Once you start to trade in stocks and options you're going to want to know everything possible about what affects the price of an option. You'd want to know exactly what it is that affects the value of the options that you own, or the options that you are selling.
Those variables include the strike price, the expiration of the option, and the GREEKS.
The Greeks include a number of different variables the delta, the gamma, the theta, the vega, and the rho.
Learn more about earning a consistent monthly income and building long-term wealth through trading options.
http://ExpertOptionTrading.com/videos

Views: 2720
howtotradeoptions

Binary Options Trading - Binary options Strategy 2016: Binary Options Review of Binary options Best Strategy 2016
★ GET BONUS ➤➤ http://iqopts.com/bonus - [On first deposit on binary options]
★ FREE REGISTER ➤➤ http://iqopts.com/demo - [Demo Register on binary options]
Binary option strategy - IQ Option Secrets: Binary Options Best Strategy 2016 (IQ Options Tutorial 2016 - Binary Options Secrets 2016)
MAKE MONEY WITH BINARY OPTIONS STRATEGY
Binary options are a simple and a comfortable financial tool, due to binary options secrets and using binary options strategy 2016 (iq option شرح) you can make huge money on iq option. Binary options trading are a comfortable and exciting way to earn money, and iq option strategy is a main secret tool of binary options trading. Today binary option trade gained a very high popularity because of a high possibility of capital increasing and because binary options strategy 2016. Binary option trade is only about 2 buttons: Up or Down. In this binary options tutorial you will learn about the binary options secrets (binary options signals, iq option strategy 2016 etc.)
BINARY OPTIONS - IT'S EASY
To get your income all you need is using binary options strategy 2016 (iq option شرح) to correctly forecast the price movement in a chosen market active in a chosen time on iq option. For example if you think that USD value will increase, relatively to EUR – press “UP”. If you are concerned, that it will fall – press “Down”. You have only 2 options – this is why the option is called binary. As you can see – everything is simple in Binary options trading if you choose iq option strategy 2016 (iq option شرح). If by the moment of option expiration your forecast is correct, you get the income on iq option. Watch this binary options tutorial about binary option secrets in binary options trading and today you will be able to use binary options strategy 2016 and make good money on iq options.
Remember - Binary Options is not a SCAM!
Good luck!

Views: 27062
Binary Options Strategy

Understand the options strike price, the predetermined price at which you buy or sell an underlying futures contract.
Subscribe: https://www.youtube.com/subscription_center?add_user=cmegroup
Learn more: https://institute.cmegroup.com/
CME Group: http://www.cmegroup.com/
Follow us:
Twitter: http://twitter.com/CMEGroup
Facebook: http://www.facebook.com/CMEGroup
Topic: price range, option price interval, interval rule, strike price, exercise price

Views: 335
CME Group

On Nov 6, 2018, I sold (to open) a ratio put spread on Apple (AAPL). AAPL dropped after I placed my trade, so I was able to take advantage of the extra profit on the embedded "bear put spread" (watch Part 4: https://youtu.be/rT2r8mLL9Y4).
Today (12/13/2018), with one day remaining until expiration, the "extrinsic" value is negative 17 cents and the "intrinsic" value is almost $20. This means there's a very high chance of "early assignment" unless I do something with my "naked" put option.
How did I manage this trade which has gone against me? Watch and learn.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Each week, I publish fun videos about options trading, budget travels and other money-saving ideas.
Subscribe now! It's FREE!
https://www.youtube.com/moneyandlilia/example?sub_confirmation=1
Lilia
www.moneyandlilia.com
copyright

Views: 400
Lilia Lilia

http://prpowershot.com PRPowershot finding the hottest aged domains for you 24 x 7.
The Pr Powershot system will find the aged domains and pageranked domains for you with the new Sentinel system that allows you to configure your expired and PR domain search.
When a domain with the PR you are looking for - or keywords etc is found... You will be alerted and taken straight to the list of domains that meet your criteria.
PR powershot is a domain analysis software that is like having a domain sniper - it finds expired domains, expiring domains, dropped domains, aged domains and domains with Pagerank (PR) and puts them in your hands.

Views: 2486
Walter Bayliss

Option Payoff Diagrams For Put Options and Call Options, What do they mean?
Buy The Book Here: https://amzn.to/2CLG5y2
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle
In this video we learn about options payoff diagrams for put options and call options, we see what the payoff diagrams look like for being long a call, long a put, short a call and short a put. We learn how to understand these diagrams. Later there will be a video on options combinations and how to draw those payoff diagrams.
An options payoff diagram, profit and loss diagram, or risk graph, is a visual representation of the possible profit and loss of an option strategy at options expiration. Option traders use these diagrams to evaluate how a strategy may perform over a range of prices, thereby gaining an understanding of potential outcomes. Because of the visual nature of a diagram, traders can evaluate the potential profit and loss – and the risk and reward of the position – at a glance.
To create a profit and loss diagram, values are plotted along the X and Y axes. The horizontal axis (the x-axis) shows the underlying prices, labeled in order with lower prices on the left and higher prices towards the right. The current underlying price is usually centered along this axis. The vertical axis (the y-axis) represents the potential profit and loss values for the position. The breakeven point (that indicates no profit and no loss) is usually centered on the y-axis, with profits shown above this point (higher along the y-axis) and losses below this point (lower on the axis).
Trading and Pricing Financial Derivatives

Views: 87
Patrick Boyle

Go to http://ExpertOptionTrading.com/videos for more free index option videos.
Okay, let's get into trade selection. Trade selection is really part art, part science, as always. We want to always trade with confidence. What we're going to do is that we're going to take a look at some of the index options that we can put positions on, and begin building our portfolio.
That's what we really want to focus on, is the idea of building a portfolio. It's not just putting on a position here, and a position here. That doesn't really make any sense. What we want to do is create a portfolio of positions that really helps us achieve our objective of generating monthly income from the markets.
In our test account here, what we want to do, is we first want to look at the indexes that we want to put positions on. Normally, what I do is that I take the EEM, which is the I-shares merging markets. Let's take a quick look at a graph of it.
This is the I-shares emerging market ETF. It seems to be trading very well for us. It tends to trend in a pretty nice pattern. It tends to stay within channels, here. Like I said, I'm not a big technical analysis guy, but what I like to do is see support and resistance point, and I like to check channels over time. This has been in a channel, now, since back in early October. It's just stayed in a downtrend channel, here.
These blue lines are a potential uptrend channel that it might be following, but it did hit this resistance right here, at the old channel line that I've got at the upper resistance. We may continue to see it trend lower. On the other hand, I've got this blue uptrend channel, just in case it changes directions.
As you can see right now, it hit a high of around 144. It started to drift down here, over the last 4 or 5 days. Now, how would we play this? You can see that it's been in a downtrend. It's been following this channel pretty closely. It's dipped below, it's come back up, and it's hit the upper trend line now, at four points. There's a solid downtrend in effect.
It's also below its 200-day moving average. It got above it, now it dropped below it. That is a strong indication that it may continue lower.
How do we play this, then? Well, in most cases, I like to put on double calendars as my opening position. A double calendar with calls just above the current price, and puts below the current price.
At this stage, because it's on the upper quarter of this channel, you might want to give it a little more room to the downside. If it does start to follow this blue line, and it starts to follow this upward channel here, I want to try to find puts right around the 132.50 level. This is the edge of the lower channel line that I have already set up here.
We've got 1 point on it, so it's not really a confirmed channel line yet. On the upside, you have 3 points where it's hit, and it looks like it's trying to follow it. Obviously, we cannot predict the future. I've tried to emphasize that as much as possible, throughout this course - that you can't predict the future. All you can do is follow what the trends are doing. Then, as we go along, the most important thing that you can do is know how to adjust your trades, after you get them in.
We are at a position now, where we need to put this on. I like to put on positions - if you look at the May options, we're 32 days out of expiration. We like to put them on between 30 and 40 days.
We've got our Junes out here at 67 days, so we'll probably do a May-June, but we have to look at the volatility levels. The volatility levels, if you come over here, are pretty close. June seems to be slightly higher. We can also take a look at the Septembers, and see what the volatility levels of the Septembers are.
For more index option videos be sure to check out our channel:
http://www.youtube.com/user/howtotradeoptions
To learn more about the Expert Option Trading course go to:
http://ExpertOptionTrading.com
Additional Tags:
vertical spreads, options greeks, what is options trading, iron condor, option volatility, option spreads, options volatility, how to trade in options, option strategies, index options, equity options, virtual trading, options spreads, virtual options trading, options trading tutorial, option trading strategy, options trading course, how to trade stock options, options trading systems, options training, learning options, learn to trade options, option trading tutorial, options trading strategy, option trading course, option trading systems, options trading basics, option trading basics, option trading system, options trading courses, options trading training, trade options, what is a stock option, options strategies

Views: 2888
howtotradeoptions

Arabian desert music instrumental downloads

Line dance video lay low lyrics

Early chinese paper making video

Clube show de bola country music

© 2019 Veeam backup replication exchange 2018

Employee Advance Summary For the date range lists Advances paid and repaid with beginning and ending balances, one line per employee. Employee Payroll Summary Lists for the date range Gross Pay, Total Withholdings, Credits, Reimbursements, Advances and Checks Total, one employee per line. Payroll Journal Summary. Payroll Journal Summary For the date range selected provides posting debit and credit totals for the Accounting sections Assets, Liabilities, Revenue and Expenses, with totals by General Ledger account number within each section. Tax Liability Summary. Form 941 Information For the date range selected, provides total Federal and State taxable wages, EIC credits, and other tax deposit information relevant to the 941 report.