Articles tagged with "Options"

Why We Always Have to Use Limit Orders in Options Trading

Why We Always Have to Use Limit Orders in Options Trading

A few weeks ago, we discussed how a stop-loss order works and why they’re so important. While a stop-loss is a key piece to risk management, some investors may not prefer to have a “hard” stop-loss. That is, a stop-loss order that is placed with a broker. Others prefer to monitor the position and, if […]

Adjusting 101: How to Adjust an Options Leg

Options trading is not a very cut-and-dry scenario. It requires constant monitoring, risk/reward calculating and at times, adjusting. To adjust an options position, sometimes we need to add a leg to our position. In other scenarios it means we need to “roll” the position. Finally, there are times where we simply need to adjust an […]

Adjusting 101: How to Roll an Options Position

In our first Adjusting 101 discussion, we talked about adding legs to an existing options position. Unlike stock trading, options traders have an arsenal of maneuvers they can perform mid-trade. In stock trading, we can buy, sell or do nothing. Aside from adding or subtracting an options leg though, another option is to roll the […]

Picking the Perfect Trade: A Trading Guide for Beginners (Part 2)

In our last entry, we introduced the procedure for initiating a new trade. In essence, it boiled down to three things: Decide on a direction, a time frame and a strategy. So for example, let’s say we’re bullish over the next three to four weeks and plan to take advantage of that bias with a […]

Picking the perfect trade a guide for beginners

Picking the Perfect Trade: A Trading Guide for Beginners

The great thing — and daunting thing — about the stock market is its sheer vastness. There is no holy grail; there is no perfect market, sector, industry or stock to trade. It’s full of opportunity, yet full of pitfalls should you lose your way. When it comes to options trading, it simply comes down […]

Do You Use the Most Popular Options Strategies? Here They Are

Do You Use the Most Popular Options Strategies? Here They Are

Data is a big part of any business. Heck, just ask Facebook or Google about that. But even smaller companies like to have data on their customers to better improve their product offering. They want to know what is and what isn’t working. Or in Option Party’s case, we just want to know what our […]

OTM vs. ITM: What Does “In-The-Money” Mean?

OTM vs. ITM: What Does “In-The-Money” Mean?

Investors that have been getting into options trading have surely seen terminology relating to in-the-money. In fact, there are various “money-ness” terms in the options market. There’s also out-the-money and at-the-money. So what do all of these terms mean? Put simply, the ITM, OTM or ATM term refers to where the option’s strike price is […]

Trading Options on Stocks vs ETFs Is There a Big Difference

Trading Options on Stocks vs. ETFs: Is There a Big Difference?

Some investors may wonder what the difference is between trading ETFs and stocks. This question only grows more complicated when options are introduced. To be frank, trading ETFs vs. stocks is quite different, as each asset has a different risk/reward profile. It doesn’t help that not all stocks are equal, nor are all ETFs. For […]

Right Direction, Wrong Options? Your Problem Might Be Implied Volatility

In our last post, we were discussing end-of-day pricing vs. real-time data. In options, a lot of different variables go into pricing these contracts. One of those inputs is referred to as implied volatility. Implied volatility, or IV, is an input that many traders have likely heard of, but may not fully understand. However, understanding […]