Options contracts tend to decrease in value as they get closer to expiration. That’s called time-decay. Simply put: you can lose money with options even if you make the right call about the underlying security but ignore time-decay. On the other hand, you can also let time-decay work in your… Read More

If you’d like to know how a change in implied volatility will affect the price of an options contract, you’ll have to look at vega. Vega is one of “the Greeks.” Those are measurements that give traders insight into how an option will respond to various market forces. Other Greeks… Read More

If you’re serious about trading options, then you need to understand implied volatility (or IV). Why? Because it’s a stat that helps you place winning trades. If you don’t pay attention to IV, you could end up buying high or selling low. In either case, you’re more likely to lose… Read More

If you’re a seasoned options trader and you’d like to make a profit off of a stock that will stay within a price range in the near term, consider using an iron butterfly strategy. You really need to know what you’re doing, though. An iron butterfly involves four trades. It’s… Read More

How much does an option change in value as its underlying stock price moves one way or the other? The answer to that is the delta calculation. Delta is one of “the Greeks.” Those are statistical values that give you important info about options. Other Greeks include theta, vega,… Read More

How would you like to profit from a stock that moves significantly in either direction? If so, then consider the long strangle strategy. The key here is that you need large movement in the underlying stock for the trade to be profitable. It doesn’t matter which way the stock moves,… Read More

Today we’ll look at a popular investing arena: the cheapest dividend stocks in the stock market. We need to be a little bit careful when hunting for the cheapest dividend stocks, because sometimes dividend stocks are cheap for a reason. Investors are often enticed by a very high dividend yield… Read More

Let me say this now: penny stocks are for speculators only. Even the cheapest penny stocks make for the worst securities in the stock market. Penny stocks offer ownership positions in companies that have extremely low chances of success. Penny stocks also have a higher chance of being manipulated via… Read More

How would you like to earn a significant return off of a stock that drops in value or stays the same? If so, then consider the naked call strategy. A naked call, or a short call, involves selling an option when you don’t own either the option or the underlying… Read More

How would you like to earn a significant return off of a stock that increases in value or stays the same? If so, then consider the naked put strategy. A naked put, or a short put, involves selling a put option when you don’t have a short position in the… Read More