Cole Turner
Protective Put – Option Trading Strategy
The protective put is an option strategy where an investor buys a put option for an underlying stock that he owns in order to hedge against a drop in that stock’s price. This is a useful strategy to protect against the fall in a stock’s price. By reading this article, investors will gain a basic […]
What is a Calendar Spread? – Options Trading
A calendar spread is an option strategy where an investor buys an option while simultaneously selling an option of the same type with the same strike price but with a different expiration date. The purpose of a calendar spread is to profit from the passage of time. By reading this article, investors will gain a […]
Warrants vs Options: Understanding the Key Differences
A stock warrant and a stock option are financial contracts between two parties that grant the buyer the right to buy or sell shares of stock at a set price within a defined period of time. Stock warrants and stock options are similar investment securities that can be used to generate a profit or used […]
What is the Meaning of Vega in Options Trading?
In relation to options, Vega represents the amount an option’s price will change with a 1% change in the implied volatility of the underlying security. This article will give investors a better understanding of what Vega is, and will show how Vega is used in an example. Knowing what Vega is and how it affects […]
Quadruple Witching – What is it?
Quadruple witching occurs four times a year and refers to the third Friday of March, June, September, and December. On these days, stock index futures, stock index options, stock futures, and stock options all expire simultaneously. This causes an increase in volume and volatility of the securities. The reason that trading volume and volatility increase […]
Understanding a Risk Reversal – Options Trading
A risk reversal is an options strategy that is used to protect a long or short position on an underlying security. The risk reversal strategy is appealing to experienced investors because it offers the potential to hedge against unfavorable price swings with a very little cost. This article will cover the basics of the risk […]