All Entries Tagged With: "putoption"
A 20-Year Put: What’s It Worth?
On August 4, Reuters reported that Warren Buffett could “get in a bind” over options because of new provisions in the Dodd-Frank financial reform bill. Over the past few years, Buffett’s Berkshire Hathaway (BRK/B) has sold options for various worldwide stock indices worth billions of dollars without posting collateral. Does the Dodd-Frank bill now require [...]
What’s the True Price of Gold Insurance?
Although calls and puts are not insurance products per se, they can be used to protect or hedge an investment, much like insurance policies protect an asset. Brad Zigler of HardAssetsInvestors posted an article on the “price of gold insurance” as measured by the options market. He compares the prices of December put options on [...]
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, [...]
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 – [...]
ETFs Blemished?
Last month’s “flash crash” brought some unwelcome attention to exchange traded funds (ETFs). On May 6, some ETFs traded at extreme prices compared to the portfolios they’re designed to track. That triggered a cascade of stop market orders that brought chaos to the markets. Some of those extreme trades were cancelled. According to John Spence [...]
