A straddle is an options strategy where an investor simultaneously buys a call and put with the same strike price and expiration date for the same underlying stock. A straddle is an effective strategy to use when an investor expects an underlying security to have significant volatility in the near future. By reading this article, […]
The long straddle and short straddle are option strategies where a call option and put option with the same strike price and expiration date are involved. The long straddle offers an opportunity to profit from a significant move in either direction in the underlying security’s price, whereas a short straddle offers an opportunity to profit […]
An option spread involves simultaneously buying and selling options of the same type with different strike prices and expiration dates for the same underlying security. Option spreads are appealing to investors because they can be used to reduce the total cost of entering a trade. This article will provide a basic understanding of certain option […]
A put spread is an option strategy where an investor buys a put option while simultaneously selling a put option. A put spread is used by investors to reduce the total cost of entering a trade. After having read this article, investors will gain a basic understanding of the different types of put spreads and […]
A foreign exchange option, also known as an FX option or a currency option, is a contract that grants the buyer the right, but not the obligation, to buy or sell currency at a specified exchange rate on or before an expiration date. Currency options give corporations, financial institutions, and individuals the opportunity to limit […]
Delta hedging is an option strategy whose goal is to limit the risk associated with price movements in the underlying stock, by offsetting long and short positions. Like other hedging strategies, delta hedging is a good tool to use to minimize, or eliminate, potential loss in an investment. By reading this article, investors will gain […]