Over the last few weeks we have been looking at options Greeks, invaluable tools for serious options traders. Greeks measure the sensitivity of the price of an option to a change in a specific variable. We already explored delta, gamma, and vega. Today we focus on rho. Rho is a measure of the change in […]
In recent articles we covered delta and gamma, important Greeks that option traders should look at before trading options. Both delta and gamma are related to the sensitivity of an option’s price to changes in the price of the underlying asset. The difference between the strike price of an option and the price of the […]
Is the long anticipated Correction upon us? Is the Bull run over, at least for now? Are you tempted just to get to cash and be safe? Maybe, maybe not. One thing is certain, the only thing worse than buying at the top is selling at the bottom. And you’d sure hate to get out […]
Last week we looked at delta — one of the most important Greek letters for options traders. Delta is significant because it captures the expected change in the option price deriving from a unit change in the underlying price. So, a delta of 0.75 means that if the underlying increases by $1, the option will […]
Sometimes bad things happen to good stocks. And when this happens, good stock trades can quickly become broken stock trades. Just like a rising tide lifts all boats, when the tide goes out, the boats go lower. Massive market sell-offs show no mercy, are not selective, and take no prisoners. What can you do when […]
Last week we introduced you to options Greeks, indispensable tools for any serious option trader. Because the price of an option is influenced by several variables, it’s important to isolate the effect of each variable on price. This helps us understand the impact a change in interest rates, underlying asset price, volatility, and time-to-maturity can […]
If you’re familiar with options trading you’ve probably heard about the Greeks. Not the folks from Greece, but the Greek letters that are often used to measure dimensions of risk involved in an option position. Before we dive into options Greeks, let’s review some basics about contracts. An options contract defines basic features of an […]
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