by Trader | Apr 27, 2023 | Journal
Extra premium has been pumped into the price of the option being sold. The underlying stock price needs little or no movement to achieve maximum profit. 1 and 2 can be realized using front-month options. Look for an event that produces a major move in the price of...
by Trader | Apr 27, 2023 | Journal
The bull put spread and the bear call spread are credit spreads. These trades bring money into your account, which ultimately becomes a profit if the stock price reaches or exceeds the targeted level at expiration. These trades are typically short-term trades that...
by Trader | Apr 27, 2023 | Journal
The bull call spread and the bear put spread are debit spreads. For these trades to pay off, the stock needs to have enough time to move to the targeted level. For this reason, you want to use options with expiration dates that allow enough time for this move to...
by Trader | Apr 8, 2023 | Journal
Bear spread A bear spread can be set up using: Calls: 1 short call with a lower strike price. 1 long call with a higher strike price. Puts: 1 short put with a lower strike price.. 1 long put with a higher strike price. Bull spread A bull spread can be set up using:...
by Trader | Apr 5, 2023 | Journal
The following is a theoretical trade on AAPL options. Suppose we enter into a bull spread with a strike price of 167.50 and 170 when the stock price is 151.03. We expect the stock prices to move up and investigate the value of the stock options. Trade date6 Mar...
