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Introduction to Options Greeks

While many highly mathematical textbooks have been written about Options Greeks, a trader does not have to be a mathematical genius to understand the basics of the Greeks. And such an understanding will greatly enhance any trader’s ability to trade options profitably. There are five Greeks: Delta, Gamma, Rho, Theta and Vega. They were first identified More...

by Marcus Holland | Published 8 years ago
By Marcus Holland On Tuesday, November 27th, 2012
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Barrier Options Explained

Barrier options are similar to standard stock options, although there are vital differences. Where a standard call option or put option have a payoff that only depends on whether the strike price has been exceeded More...

By Marcus Holland On Tuesday, November 27th, 2012
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Options prices and put-call parity

Introduction Although references to the basic underlying principles have been highlighted by authors long before the advent of the 20th century, the modern concept of put-call parity in options pricing was first More...

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By Marcus Holland On Tuesday, November 27th, 2012
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Basic Options Trading Strategies Summarised

Options trading can be as simple or as complex as the trader wishes to make it. Those who are familiar with stock trading, where one can only make money if the price of the underlying stock goes up, tend to start More...

relationship between stocks and stock options
By Marcus Holland On Tuesday, November 27th, 2012
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The Relationship Between Stocks and Stock Options

For many traders who are used to the world of stock trading, understanding the relationship between stocks and options is initially very difficult. There are similarities, but there are also vital differences. The More...

By Marcus Holland On Monday, November 26th, 2012
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Options Theta Explained

The fact that an option has an expiration date has given rise to the concept of Theta. A 3-month option, for example, stops existing after 3 months. If it hasn’t reached the strike price by that date, it expires More...

By Marcus Holland On Saturday, November 10th, 2012
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The Iron Condor Spread

There is little doubt that among beginner options traders the iron condor spread is one of the most popular. The ability of this trading strategy to profit from markets that are trading within a reasonably narrow More...

By Marcus Holland On Friday, November 2nd, 2012
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Combining Options and Futures

In the world of options trading one seldom finds a trader who knows a lot about futures trading. Options traders would usually immediately raise objections such as ‘unlimited risk’ and ‘high slippage’ when More...

By Marcus Holland On Friday, October 19th, 2012
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Debit Spreads Explained

In this article we will focus on an in-depth discussion of debit spreads. Definition A debit spread is an options spread for which the trader has to pay a net debit to enter into the transaction. This involves buying More...

By Marcus Holland On Wednesday, February 8th, 2012
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Options Trading and Margin Requirements

There are few things that options traders find as confusing as margin requirements. The fact that there is a difference between the margin requirement for stocks, futures and options further complicates the issue. Definition In More...