How to sells calls and puts

Traders sell calls and puts depending of their assumption. They will receive option premium upfront by selling options. In this yield-seeking environment, selling options is a strategy designed to generate current income. We sell options with high implied volatility. We want the option to expire worthless or we buy them back when they are much cheaper. If you the options […]

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How to Trade Volatility effectively

For traders it is important to know how to trade Volatility. When the stock moves up and down Volatility increases. While uncertainty increases the option premium increases. This change of the stock option premium always is exaggerated. And the experienced trader knows that the the price will have a mean reversion. Mean reversion is the tendency of a stock price to […]

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Advantages by Trading Implied Volatility

Trading Implied Volatility is selling the premium of the volatility expectation that is priced into individual options. The implied volatility of an option is actually backed out of the price of the option. All the inputs of an options pricing model are known (time to expiration, strike, price, interest rates) except for the volatility that the option is pricing in. […]

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Trading Implied Volatility

Trading Implied Volatility is a key concept for option traders. Even if you are a beginner, you should try to have at least a basic understanding. Options with a high Implied Volatility are more expensive than options with low IV. This knowledge gives us an advantage when we sell options and receive option premium. Option volatility is reflected by the […]

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The ABC of selling Options

Learn the ABC of selling options. Investors who trade options has to make many decisions like buying or selling options. Which strategy is best considering the market. What is investors assumption about the stock. If an investor is bullish, she can sell a put, whereas if she is bearish, may sell a call. There are many reasons to choose each […]

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