Cole Turner
Broken Wing Butterfly and Butterfly Spread – Option Trading Strategies
The broken wing butterfly and the butterfly spread are two different types of option trading strategies that involve trading four option contracts with the same expiration date, but with three different strike prices. These strategies can be profitable for investors, but also contain risk. This article will explain the broken wing butterfly and butterfly spread […]
Bear Call Spread and Bear Put Spread – Option Trading Strategies
The bear call spread and the bear put spread are option strategies used when an investor expects the price of the underlying security to fall. These strategies can be advantageous for investors when trying to profit off of the decline in the underlying security’s price. This article will explain the basics of the bear call […]
Stop Loss Order vs Stop Limit Order – What Is It?
A stop loss order and a stop limit order are two tools that can be used by an investor to get into and out of the market at times when an investor may not be able to place an order manually. By using these orders, an investor is telling his broker that he does not […]
What Is the Strike Price (Exercise Price) – Options Trading
The strike price, also known as the exercise price, is the fixed price at which the owner of an option either can buy or sell an underlying security. The strike price is determined at the time the options contract is formed. That strike price is agreed upon between the buyer and seller of the options […]
What it Means to Exercise an Option?
To exercise an option means to put into effect the right specified in the options contract. An options contract gives the buyer the right, but not the obligation, to buy or sell an underlying security at a specified price on or before an expiration date. If the option buyer decides to buy or sell the […]
The Basics of Option Pricing – How to Understand It
The price a buyer pays for an option contract is called the option premium. This article will explain the three things that make up the pricing of an option: intrinsic value, time value and implied volatility. It is important to understand what these three things are in order to differentiate between a good and a […]