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Options for Low Volatility: Setting Up and Rolling Calendars

Options for Low Volatility: Setting Up and Rolling Calendars

Option traders interested in premium collection strategies—those that profit from time decay—often turn to short strategies such as iron condors or short verticals. These can be considered “credit” trades. But there are debit option strategies that also profit from time decay, such as the calendar spread. In this two-part series, we’ll look at calendars and how traders can set ...

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Double Calendars: The Low Volatility Trade with Two Peaks
November 6, 2017

Double Calendars: The Low Volatility Trade with Two Peaks

If you’re looking for an option strategy that's designed for a lower-volatility environment where the underlying price action gravitates toward either of two different...

Straddles and Strangles: Basic Volatility, Magnitude Strategies
October 31, 2017

Straddles and Strangles: Basic Volatility, Magnitude Strategies

“This could be the start of something big,” you say? Perhaps there’s an earnings report coming up in a stock you’re considering. Or maybe there’s a product launch ...

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Your Options ABCs: Basic Call and Put Option Strategies
October 26, 2017

Your Options ABCs: Basic Call and Put Option Strategies

Before learning to run, you had to first crawl, then walk. Before penning that masterpiece, the writer needed to learn the ABCs. And before jumping into options ...

On Any Given Friday: An Introduction to Weekly Options
October 19, 2017

On Any Given Friday: An Introduction to Weekly Options

It used to be that option expiration occurred once a month, generally on the third Friday of the month. That all changed in 2005 when exchanges began listing options ...

Confidence Boost: Tools to Help Hone Your Options Strategy
October 12, 2017

Confidence Boost: Tools to Help Hone Your Options Strategy

Are you new to options trading? Do you have a potential trade idea but you're not quite confident enough to pull the trigger? Since it may be unwise to put on a trade ...

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Volanthology World Tour: Foreign Exchange Volatility
October 5, 2017

Volanthology World Tour: Foreign Exchange Volatility

Despite what you read in the papers and see on the business reports, there's a lot more to volatility than VIX—the CBOE Volatility Index, aka "the fear index."

Scalping the Gamma: Dynamic Hedging of Option Positions
September 28, 2017

Scalping the Gamma: Dynamic Hedging of Option Positions

So you’ve identified a stock in which you believe the implied volatility (IV) is too low. Maybe it’s been fluctuating quite a bit, or maybe you think it is entering a period of ...

Know Your Contract Specifics: Multiplier, Delivery Terms and More
September 28, 2017

Know Your Contract Specifics: Multiplier, Delivery Terms and More

When trading stock, knowing the amount of capital you’re investing is as straightforward as multiplying the price of the stock by the amount of shares ...

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Gamma Scalping Intro: Synthetics, Put-Call Parity and Delta-Neutral
September 21, 2017

Gamma Scalping Intro: Synthetics, Put-Call Parity and Delta-Neutral

A recent article introduced negative theta—that is, options positions that lose theoretical value each day due to the passage of time. The article demonstrated how ...

Volanthology: A Tour of VIX and Other Volatility Indexes
September 15, 2017

Volanthology: A Tour of VIX and Other Volatility Indexes

When you hear the phrase "stock market volatility, what's the first thing that pops into your mind? If you're like many investors, you think of the VIX—the CBOE ...

Price Action vs. Price Erosion: The Positive Side of Negative Theta
September 7, 2017

Price Action vs. Price Erosion: The Positive Side of Negative Theta

Many traders tend to gravitate to options strategies with positive theta—those in which the theoretical value increases with the passage of time. Certain positive ...

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Got a Directional View? Here’s an Option Spread to Consider
August 31, 2017

Got a Directional View? Here’s an Option Spread to Consider

Directional trades, like long calls or long puts, offer you the chance to profit if you’re right about the direction of the underlying stock. But, having profits that aren’t ...

Do the Math: Calculating Risk and Potential Profit on Vertical Spreads
August 24, 2017

Do the Math: Calculating Risk and Potential Profit on Vertical Spreads

Many options traders say that they trade a consistent quantity when initiating vertical spread trades. And while this strategy might keep the contract numbers orderly ...

Term Structure and Covered Calls in a Low-Volatility Environment
August 17, 2017

Term Structure and Covered Calls in a Low-Volatility Environment

When summer trading is slow, and everyone’s either at the beach or wishing they were, implied volatility (IV) can get pretty low. For covered call sellers, lower IV means ...

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Hold Onto Your Floaties! New Swim Lessons with Video
August 7, 2017

Hold Onto Your Floaties! New Swim Lessons with Video

If you're a dedicated (or even an occasional) participant in our daily Swim Lessons broadcasts in the thinkorswim® platform, you understand how dynamic the market can ...

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