Options Trading

Option spreads can be used in a number of ways, its definition is simply taking opposite positions in terms of buying different strike prices on the same or different expiry dates for the same traded underlying financial instrument, thus creating a spread of positions as part of a single strategy.

Today's economic event :Housing Starts , Building Permits, Export Prices ex-ag, Import Prices ex-oil, Industrial Production, Capacity Utilization...

VIX cash droped by $4.59 to $31.87.  VIX futures still trades abnormally of it's "NORMAL" term structure, still implying higher volatility. Combining the dark stormy clouds hovering Europe  i'd say that we are in a technical correction and  we are waiting  for the right entry point to the downside.
The "UpDown" signals are an outcome of calculated calls and puts implied volatility.Positive numbers higher calls IV traders believe that the stock will rise and are willing to pay more for the calls, the opposite goes for the puts.

Today on the board :Initial Claims, Continuing Claims and Trade Balance...

Markets are in a middle of a turmoil.  Today at 08:30 AM Initial Claims, Continuing Claims and Trade Balance, our opinion it will add to already bleak horizon of our economy. VIX calculated derivatives (Volume and prices look at the table below) gained momentum implying higher volatility and option traders would be advised to trade straddles to scalp the markets volatility.

The "UpDown" signals are an outcome of calculated calls and puts implied volatility.Positive numbers higher calls IV traders believe that the stock will rise and are willing to pay more for the calls, the opposite goes for the puts.

Diagonal option spreads is yet another kind of option trading strategy, that aims to shift the odds more in our favour. Generally diagonal spreads can have a better risk / reward ratio than any other strategy. Particularly in cases where you consider writing naked options, it might be possible to replace the whole naked option writing idea with a safer diagonal spread.......read more

Options’ trading offers the opportunity to investors, to fully protect their long stock portfolio, using what is known as a Costless-Collar strategy. The idea is to provide hedging on the long stock held, without paying a net premium for it!.....   read more

Option spreads are trading strategies involving taking both sides of an option trade, but in such a way as to achieve an overall lower risk / reward ratio than standard, outright option purchases. Generally, there are two types of spreads, Horizontal and Vertical. Horizontal means that we pick 2 option contracts,.....   read more

The Bull Put Spread is one of the easiest spreads to understand, yet it is one of the most profitable option trades. As we know a spread trade can always be better than a lame outright option trade!.....   read more

The simplest way to make a smooth transition from stock trading to options trading, is to implement a straightforward, directional stock trading strategy, based upon your existing stock trading system, the only real reason you prefer options trading in this case, is because you can take advantage of the asymmetrical behaviour of Delta. That is what allows you to win $1,000 from a given stock price move, and only lose $700 if you are wrong and incur the same stock price trend on the losing side.