Cole Turner
Option Premium – Everything You Need to Know
An option premium is the price paid by the buyer to the seller for an option contract. Premiums are quoted on a per-share basis because most option contracts represent 100 shares of the underlying stock. Thus, a premium that is quoted as $0.10 means that the option contract will cost $10. Whether an investor wants […]
Expiration Date – Options Trading
The expiration date of an options contract is the last day at which the buyer may exercise his right on the option. Once the options contract passes its expiration date, the option expires and becomes worthless. For example, call options give the owner of the option the right, but not the obligation, to buy an […]
Introducing Basic Examples of Trading Options — Calls and Puts
Options are contracts between a buyer, known as the option holder, and a seller, who is the option writer. Such a contact gives the holder the right, but not the obligation, to buy or sell an underlying security at a set price by an expiration date. This set price is known as the strike price. […]
What is an Option Chain? How Do You Read Option Quotes?
An option chain is a matrix listing for a single underlying security that shows all of the available option contracts. Essentially, an option chain is a list of all the call and put options available for trading a particular underlying security, such as a stock. It is crucial that investors are able to read option […]
Straddle vs Strangle – Option Trading Strategy
Straddles and strangles are option strategies that allow an investor to profit from significant price moves either upward or downward in the underlying stock. These strategies combine call and put options to create positions where an investor can profit from price swings in the underlying stock, even when the investor does not know which way […]
LEAPS Options – What are they?
LEAPS, or long-term equity anticipation securities, are publicly traded option contracts with expiration dates that are longer than one year. LEAPS offer long-term investors the opportunity to gain exposure to prolonged price changes in the underlying security without needing to use a combination of short-term option contracts. This article will give investors a basic understanding […]