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Options

Swim Lessons: A Primer on Option Probabilities

In our daily Swim Lessons program, co-host Scott Connor and I often refer to some trades and strategies as “high probability,” but what does that phrase really mean? Probability is generally defined as the likelihood of an event happening, within a certain time frame, expressed as a percentage. With option trades, the “event” may be the likelihood of an option being in-the-money ...

May 18, 2017

Looking to Limit Stock Risk? Popping a Collar Is an Option

Suppose you’re long a stock that has appreciated nicely, but you’re getting nervous that it may move lower. You don’t really want to exit the stock, but you’re not sure ...

May 18, 2017

Swim Lessons: Option Melting and Theta Decay Strategies

Options traders can potentially make money in the market when one of two things happens: when their long option goes up in value, or their short option goes down in...

May 11, 2017

Swim Lessons: Spread Your Trading Wings With Iron Condors

In Swim Lessons, we seek to teach options traders about risk-defined, high probability options trades. We’ve covered buying and selling vertical spreads.

May 4, 2017

Swim Lessons: Asking ‘What If?’ With the Theoretical Price Tool

Often, when a company has a big news event, such as an earnings release or announcement of a new product or initiative, the company’s stock will have one big move ...

May 3, 2017

The Fearless Index? VIX Hits Fresh Low as Rally Rolls On

History was made last week as the Nasdaq Composite Index rallied above 6K for the first time ever, but another milestone was the (near) historic drop in the VIX. ...

April 27, 2017

Synthetics: A Useful Accessory for Your Options Wardrobe

As any fashion professional would tell you, though your collection of outfits provides the base of your wardrobe, the accessories—those extra little add-ons—can make ...

April 20, 2017

Swim Lessons: Brush Up On Your Greeks This Earnings Season

Springtime is upon us—a time for new beginnings, and new seasons. Like baseball, for instance, and earnings. Are you among those considering options strategies ...

April 13, 2017

Looking for a Soft Landing? Try an Iron Condor to Trade Earnings

Earnings season is upon us, and with it brings increased volatility for those stocks reporting results. ...

April 13, 2017

Swim Lessons: Familiar with the Risk Profile Tool?

In last week’s Swim Lessons article we looked at the power of the Risk Profile tool in the thinkorswim® platform from TD Ameritrade, and demonstrated how ...

April 6, 2017

Swim Lessons: Lost at Sea? The Risk Profile Tool Can Be Your Message in a Bottle

If you were stranded on a deserted island and could pick three things with which to survive, what would you choose? Here’s what I’d pick: sunscreen, a bag of ...

March 30, 2017

Swim Lessons: Surf’s Up! Catch A Wave With These Volatility Products

If history has taught us anything, it’s that market uncertainty can almost always be expected. However, in Swim Lessons?, we like to say that a little volatility ...

March 23, 2017

Singing the Low-Volatility Blues? Try Calendar Spreads

In last week's article, Scott Connor, my Swim Lessons co-host, introduced the calendar spread, a risk-defined options strategy involving the sale of a short-term ...

March 23, 2017

Double Calendars: Is This the Right Strategy for You?

If you are looking for an option strategy that is designed for a lower-volatility environment where the underlying price action gravitates towards either ...

March 16, 2017

Swim Lessons: Options Strategies for Quiet Markets

One of the advantages that options offer is the potential to profit in an upward, downward, or range bound ...

March 9, 2017

Rugby and the Art of Options Trading

I played rugby in college. There’s an old quote I use when explaining the sport to a skeptical newcomer. I like to think that it applies to options trading as well...

March 2, 2017

Swim Lessons: How Volatility and The Rule of 16 Can Offer Perspective

For option traders, volatility can make or break a trade. 'The Rule of 16' is another method that offers perspective on volatility measurements...

February 28, 2017

Know Your Options: The Basics of Calls and Puts

One of the main things that makes options attractive to investors is the flexibility they can provide during a variety of market conditions. Regardless of whether...