Options trading often appears intimidating, but at its core, it is simply a contract between two parties. When you buy a stock, you own a piece of a company. When you buy an option, you own the right ...

When a company pays a dividend, it doesn’t just affect the shareholders’ bank accounts—it changes the mathematical landscape for options traders. Many newcomers are surprised to learn that a stock pri...

Writing a cash-secured put is often described as the “get paid to wait” strategy. Instead of placing a limit order to buy a stock at a price you like, you sell a put option at that same price and coll...

The VIX, or the Cboe Volatility Index, is often called the market’s “fear gauge.” While the Dow Jones and the S&P 500 tell you what is happening in the market, the VIX tells you how investors feel...

When you look at an options chain, you will see a column that shows “IV” — the implied volatility for each expiration. That number is a percentage, like 35% or 60%, but standing alone, it is virtually...

Covering a stock you own with a call option is one of the most popular strategies in the options world, often marketed as a conservative way to “boost” income from a portfolio. The appeal is straightf...

A bear put spread is a defined-risk options strategy designed to profit from a moderate decline in the price of an underlying stock or exchange-traded fund (ETF). It involves buying a put option at a ...

Options traders often hear that certain strategies can “act like” owning stock, or that a position can be made “synthetic.” This is not just colorful language—it is a precise mathematical relationship...

Options traders often hear that straddles are the go-to strategy for betting on a big move, but they are expensive. A strangle offers a more cost-effective alternative that achieves a similar goal. Wh...

When you first start trading options, you’ll likely focus on finding the right strategy—whether that’s a covered call, a cash-secured put, or a complex spread. But there is a silent factor that determ...