Options Strategy Lessons

As an options contract gets closer to expiration, it naturally decreases in value. That rate of decrease is called theta. Theta is one of “the Greeks,” or statistical values identified by Greek letters that traders use to evaluate stock options. Other Greeks include: Delta – the option’s sensitivity to the… Read More

How would you like to earn a nice return by doing nothing more than letting time increase the value of your position? If so, then you should consider a horizontal spread. A horizontal spread, or calendar spread, involves buying and selling two options for the same underlying stock… Read More

The idea behind the strategy is to let time decay (or theta) work in your favor. If the price of the stock doesn't move much, you'll make money at the expiration date of the near-term option. In the guide, I'll go over the calendar spread in detail and explain how you can profit from it. Read More

If you think a stock is going down in the near future and you’d like to make some money without shorting it, consider using a bear call spread strategy. A bear call spread (or short call spread) is often better than shorting a stock because you don’t need nearly the… Read More

If you’re bullish on a stock you own but also concerned that it’s price could drop in the near term, you should consider a collar option. That’s because a collar option offers outstanding protection against market volatility with very limited risk. The downside: you could also limit your return. However,… Read More