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 …
Here is an article without a single peice of options jargon. Instead of coming from the ‘what are options?’ point of view, let’s consider why you should trade them or better still ‘what’s in it for you?’
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.