Option is a right to buy or sell a financial asset like stock at a specific price. For example when you buy stock option to buy stock ABC at $50, you can buy the stock at $50 even though it is $60. That means you can get $10 profit from that option. You can buy [...]

Option is a contract which gives buyer the right, but not the obligation to buy or sell an underlying asset such as stock at a fixed price on or before a certain expiration date. There are two basic types of option contracts: Call and Put. A Call option will give the buyer the right to [...]

Option is a contract giving buyer the right, but not the obligation, to buy or sell an underlying asset like stock at a fixed price on or before a certain date. There are two types of option contracts: Call options and Put options. A Call option gives the buyer the right to buy underlying asset, [...]

Butterfly option strategy is a neutral strategy. It is used when you think that the stock price will not move a lot, or trade in narrow range. The butterfly spread is a combination of a bull spread and a bear spread. The bull spread strategy is implemented by selling an in-the-money (ITM) put option and [...]

Straddle option strategy is a non-directional strategy. This means that you can make money without knowing where the market will move. It doesn’t matter if it moves up or down, you can make money if it moves either way. The position is created by purchasing the same number of call and put options with the [...]

Do you know that there are option strategy that can gives you monthly income? The income will be generated when you sell call option or sell put option. The best option strategy for income in my opinion is selling naked puts. It is called naked put because there is no position in underlying stock. If [...]

1. Buy option with longer time to expire. This means you have more time to be right. But this kind of options is more expensive because it has more time value. I usually buy options with more than 3 months days before expiration. 2. Options usually lose most of their value in the last 30 [...]

A binary option is a simple investment.  There are two possible outcomes from this investment and the first is either you earn a predetermined amount of money or you may earn nothing. But if you wish to invest a predetermined amount of money it is important to note that you may ever actually buy any [...]

The book, Options Writing Strategies for Extraordinary Returns is written by David Funk. The book is superbly written and is about call and put option writing techniques which can be used by investors so that they can make profits from the market irrespective of the direction the market is moving in. The book has options [...]

The bear call spread strategy is used when we thinks that the price of underlying asset will go down moderately in near term. If you think the price will go down a lot, I suggest don’t use this strategy. There are better strategy for that condition. It is implemented by selling an in-the-money (ITM) call [...]