By vanko on September 10, 2011
Vertical spreads will trade between its minimum and maximum values – zero and the difference between the two strikes. In the case of a vertical call spread, the spread will trade closer to zero when the stock trades closer to or lower than the lower strike price. The spread will trade closer to maximum value [...]
Posted in Develop Your Skill | Tagged mastery, options, prices, spread, trading
By vanko on March 11, 2011
Financial spread betting works using the world markets such as the FTSE 100, Dow Jones and the Hang Seng and how it will react in a given day. It is easier to explain financial spread betting by example. On any given day you can find out on the web or by placing a call [...]
Posted in Develop Your Skill | Tagged betting, faq, financial, is, spread, what
By vanko on January 18, 2011
An investor must always keep in mind that vertical spreads have an intrinsic value. This means it is possible to consider them ‘in the money.’ If a vertical spread has an intrinsic value, it can also have an extrinsic value. Unlike maximum intrinsic values that equal the difference between the strikes at expiration, maximum extrinsic [...]
Posted in Develop Your Skill | Tagged and, intrinsic, options, spread, the, trading, value, vertical
By vanko on October 10, 2010
We are going to put together an imaginary spread scenario and set it in real life events. Consider that, in October, you begin to hear about IJK stock. It looks interesting, so you use a variety of sources to learn about it. (News, charts, outside analysts, Internet research, etc.) From your investigations, you decide that [...]
Posted in Develop Your Skill | Tagged an, imaginary, mastery, options, scenario, spread, trading
By vanko on September 10, 2010
Time spreads can be a profitable investment strategy if you understand the concept of time decay. A time spread is designed to take advantage of the fact that an options decay curve is non-linear, that is, an option’s value does not decay evenly over time. As an option gets closer to expiration, its rate of [...]
Posted in Develop Your Skill | Tagged behavior, mastery, of, options, spread, the, time, trading
By vanko on August 14, 2010
Time spreads, also known as calendar spreads, are an ideal way to take advantage of time decay and changes in implied volatility. Time spread strategy focuses on the movement of time and volatility more than on the movement of the stock. Therefore, it is perfect for when you anticipate stagnant or explosive periods in a [...]
Posted in Develop Your Skill | Tagged construction, mastery, of, options, spread, the, time, trading
By vanko on July 24, 2010
When purchasing a time spread, the investor should pay attention to not only the movement of the stock price, but also the movement of volatility. It plays a very large roll in the price of a time spread, which is an excellent way to take advantage of anticipated volatility movements in a hedged fashion.
Option [...]
Posted in Develop Your Skill | Tagged effects, mastery, of, on, options, spread, the, time, trading, volatility
By vanko on March 22, 2010
During the life of a vertical call spread, the spread will trade between its minimum and maximum values (between 0 and the difference between the two strikes). In the case of a vertical call spread, the spread will trade closer to zero when the stock trades closer to or lower than the lower strike price. [...]
Posted in Develop Your Skill | Tagged mastery, options, prices, spread, trading, understanding
By vanko on December 6, 2009
Let’s put together what we’ve been talking about, develop an imaginary spread scenario and set it in real life events.
In October, let’s say that you begin to hear about IJK stock. It looks interesting, so you then use a variety of sources to learn about IJK: news, charts, outside analysts, internet research etc. From your [...]
Posted in Develop Your Skill | Tagged mastery, options, scenario, spread, test, trading, vertical
By vanko on November 1, 2009
Vertical spreads can have various names. The same vertical spread could be called several different things by several different people. We have used two terms only: vertical call spread and vertical put spread. Each of these two spreads allows for two positions, long and short.
The long vertical call spread is constructed by buying one call [...]
Posted in Develop Your Skill | Tagged mastery, options, recap, spread, trading, vertical
