The option strategist has taken on a new role as teacher as more and more traders become involved in the options market. Once considered a territory reserved for brokers and commercial investors, this is an expanding market offering protection and profit. As a result, the option strategist not only advises traders on the implementation of option strategies but has also assumed the role of teacher.
With computerized trading, smaller investors are entering the options markets with ease. The online broker who is an option strategist not only offers entrance into the trading market, but he or she offers online training too. You can learn how to:
- Leverage your money wisely
- Increase trading profits
- Protect your current stock portfolio
- Diversity your portfolio with options
- Use basic option strategies
- Use advanced strategies that include spreads
The option strategist offers the information you need to make good option investment decisions. In fact, you can learn about different types of options including the basic option, index options, option on futures and options on ETFs.
You will also learn how to read charts, evaluate market volatility, and implement hedging strategies. The option strategist is an expert in the field of options, and the goal of today’s professionals is to teach you how to become an expert too. Having access to the right information and training is critical to success in today’s do-it-yourself trading arena.
If you want to become an option strategist then the first step is taking advantage of the wealth of knowledge and information the professional offers online.
Filed under General by on Jul 22nd, 2011. Comment. 
The bull spread (not to be confused with Spread Betting) is an option strategy that is used when you have formed an opinion that the market price of the option’s underlying asset is going to rise during the option period. In a bull spread you are purchasing options with the same underlying asset but with different strike prices and/or different expiration dates. There is flexibility in how you structure your bull spread.
For example, a stock is priced at $9.50. You buy a call with a $10.00 strike price and a $.25 premium. You could buy the call and hope the stock price rises above the $10.00 strike price and is in the money. Right now it is out of the money. You do expect the stock to increase in price given the market conditions but you are not sure how high the price will go so the $1,250 premium is looking somewhat expensive.
Since the stock is going to go up, there is an opportunity but there is also a risk if the stock does not perform. In the bull spread, you can write a call that has a higher strike price and an earlier expiration date. The bull spread is the difference between the premiums. The most profit you can expect in this particular example is the difference between the strike prices less the difference between the premiums.
The most you can lose on the bull spread is the difference between the premiums times the number of options (100 shares/option). There are bull call spreads and bull put spreads.
Filed under Option Trading Strategies by on Jul 17th, 2011. Comment.
When you are ready to do your first option trade it is sure to be with great satisfaction because you have undoubtedly put a lot of time and effort into studying option basics. Too many investors shy away from options for a long time and with the first trade discover they are a fascinating and challenging investment strategy. Option strategies range from the simple put or call strategy to the complicated multiple option strategy.
Though all investing requires knowledge, when you learn how to option trade you can build on that knowledge to develop the ability to employ more complex strategies if you want. On the other hand, you can also choose to stick with the simpler strategies which many investors do. Sometimes the option trade is chosen mostly to cover an existing stock position.
The point is that you can option trade at your level of expertise making this type of investing challenging and interesting. As you learn more about option pricing features like intrinsic and extrinsic value and implied volatility, you will soon find you are ready for spread strategies.
Keeping track of your options means you must keep track of each option trade on a regular basis. Unlike stock and bonds which you buy and hold options must be regularly tracked so you don’t miss out on a profit opportunity or miss a chance to minimize a loss based on market moves. Many options contracts are as short as 30 days and the market can move fast!
Filed under General by on Jul 15th, 2011. Comment.