All Entries Tagged With: "calloption"
Stock Replacement Strategy: Locking in Profits
When you have a profitable position in a stock you bought, you can often lock in most of those profits, while still taking advantage of further upside price movement. How? Simply replace your stock with a call option. Here’s an example. Let’s say during the late spring or early summer you had purchased 100 shares [...]
Options Trading for Beginners: Option Delta Explained
If you use Zecco’s Options Strategy Builder – or choose the “Greeks” view of a chain of options – you’ll see something like the image below. The column at the left shows the option’s “delta.” What does that mean and how do you use it? Well, there’s a bit of math involved, but don’t worry, [...]
Q&A on Covered Call Options
In a recent ZeccoShare Discussion, jaetrade asked a question about covered calls: I’m new to options trading and wondering if anyone can provide an explanation of how covered calls work or some advice on writing them. Can I write a covered call on 100 shares of a stock I currently own? Also, where does the [...]
Weighing Your Options: How Puts and Calls Trade Together
When the market is plunging – and people are presumably scrambling to buy put options, those options get expensive. That’s sort of what implied volatility measures, the relative price of options based on demand. The more “panic” there is in the market, the more expensive it is to either protect your stock with puts – [...]
Shorting Against a Long Call Option
Let’s say you bought a call option that’s been very profitable so far, but as expiration nears you want to lock in some of those profits. The options market gives you many choices. You could… Sell your option and exit your entire position Roll your option out to a later month if you think the [...]
Going Deep In The Money (DITM)
As an alternative to buying a stock or ETF, sometimes traders buy “deep-in-the-money” (DITM) call options instead. What makes this strategy attractive is that you can take advantage of the price movement of 100 shares of a stock or ETF while risking less money. But like all strategies, there’s no free lunch because there are [...]
