Here is a short list of excellent books for new and intermediate level traders.
In this article, we move a little further down the track and look at how changes in other factors can affect an option. For any option trader, it is interesting information, but more importantly essential in understanding the risk in a position.
(Originally published in Active Trader magazine) What a boring game all this would be if option prices showed no fluctuations! The price, or premium, of an option is constantly changing for whatever reason. As an options trader you must be prepared, armed with the knowledge of how an option price can react in certain scenarios. You can look at that …
Not long after options became available, there were the seminars and the books and the systems that come with any new financial product. There were all sorts of people touting what they see as the best strategy for making money. This article puts all that in perspective. Is there such a thing as ‘the best strategy’?
The concept of hedging has always been a controversial one. This article looks at hedging options with the DAX.
Many of those new to trading will have difficultly understanding the concept of a margin. This short article puts things in perspecitive.
An important consideration in any trading strategy is how many contracts to trade or how much money to allocate to a particular trade. This article answers this very question.
Q: Aren’t options spreads cheaper to trade than futures spreads? A: This question is based on a misunderstanding of the mechanics of futures and options trading. Options: With options, including options on futures, you pay a “premium” when you buy an option and receive the “premium” when you sell an option. If you pay 10 cents for an option, that …