Navigating the Perilous Seas of Options Risk
Options are exciting financial derivatives, but like any adventure, they come with their own set of risks. Two main villains lurk in the world of options: market price risk and…
Calendar Spread
Trading Option Calendar Spreads Being long a calendar spread consists of a selling an option in a near-term expiration month and buying an option in a longer-term expiration month. The options…
Collars
A collar spread consists of a long futures contract, a short call and a long put. The call and put are different strikes. But have the same expiration and the same underlying…
Bear Spread
A bear spread consists of a buy leg and a sell leg of different strikes for the same expiration and same underlying contract. This strategy will pay off in a…
Bull Spread
A bull spread consists of a buy leg and a sell leg of different strikes for the same expiration and same underlying contract. This strategy will pay off in a…