Are you long or short an in-the-money call option on a stock that’s about to pay a dividend? Make sure you understand dividend risk.
Some option traders dynamically hedge positions, but doing so requires a basic understanding of synthetic positions and put-call parity.
Corporate actions such as stock splits, special dividends, mergers and acquisitions are quite common, but what happens with unexpired options?
Learn how synthetic option positions can be made by certain combinations of calls, puts and the underlying stock.
At some point in your option-trading career, you're probably going to come across the Black-Scholes option-pricing formula. So you won't mind if we break it down into simpler terms that should be useful.
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