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The Latest in Options
at your own risk - Google images
Naked Options and Risk
Option traders like to collect time decay (theta), the sale of naked options involves substantial risk. A better risk/reward profile is available by selling call or put spreads.
Up your alley? - dreamsteam.com
Is Covered Call Writing for you?
The popular option strategy -- writing covered calls has several key benefits, but is not for everyone. Beware if you are unwilling to accept less that the maximum possible gain on every trade. Collecting theta.
Think - Pixabay.com
Understanding the Covered Call Trade
When deciding to hedge any position, you make a trade -- specifically, you lose less money when the market does not go your way -- in exchange for reduced gains when the market does moves your way.
Ratio Spreads
A ratio spread is similar to a vertical spread, but it includes the sale of extra options. This trade is appropriate for experienced traders who fully understand risk management.
time - pixabay.com
Time Value vs. Intrinsic Value
The market price of an option is the sum of its intrinsic value and its time value. Only in-the-money options have an intrinsic value while all options have a time value (unless the option is completely worthless).
Danger - Google Images
The Rise & Fall of the World's Stock Markets
As happens from time to time, stock markets tumble. The prudent investor understands how to adopt risk-reducing option strategies to minimize risk.
Errors to Avoid - pixabay.com
Option Rookies: 3 Errors to Avoid
Some trading mistakes are so basic that every option trader should avoid them: Do not buy OTM options as an investment. Do not sell deep ITM naked puts. Be certain that writing a covered call allows room to earn a profit.
Trade Psychology - Wikipedia
The Psychology of Rolling a Position
Traders eagerly roll at-risk positions to reduce that risk. Why is rolling so attractive? This article discusses the psychology of rolling.
Elephant Size - Google Images
Benchmark Indexes
Benchmark Indexes allow option traders to compare the performance of a variety of option strategies. These are excellent educational tools for traders.
The Drawdown
Drawdowns are inevitable. However, for the successful trader such events are of short duration and magnitude. Being disciplined with trade plans and careful risk management are the keys to success.
Options: Fear Not
It pays to learn about options because they allow you to trade with less money at risk and to increase the chances of earning money from any given trade.
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Risk associated with Covered Call Writing
Writing covered calls is a conservative investment strategy. However, there are risks associated with the strategy. The primary risk occurs when markets tumble.
Winning - runner'sworld.com
Winning the Trading Game
Investing is a serious business. When you have won the game, when you have enough assets, stop playing the game. Protect your assets.
Contract - Google Images
Volume vs. Open Interest
"Volume" and "open interest" are related, but different. The former refers to the quantity of options traded on a given day; the latter refers to option contracts (bought or sold) that still exist -- i.e., the positions have neither expired nor be closed.
Ya Gotta Believe - Google Images; NY Metropolitan Baseball Club
Ya Gotta Believe!
When a trader comes to believe that discipline is required for long-term success, then his/her chances of achieving that success increase dramatically.
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