Stock market is the toughest exam in the world
This video introduces the aspect and impact of option Greeks on simple long option strategies. The problems associated with such long option (call/put) strategies is discussed, paving the way to modification of the strategy to a two-leg strategy, namely bull call spread or bear put spread, or debit strategies, which require an option premium outlay for executing the strategy.
The max loss in these strategies are mentioned is capped and so are profits, also referred to as Vertical spread option strategies, are a modification to the long option strategies and an improvement, especially when you don’t expect an immediate or sharp directional move, but the bias exists.
Credit spreads in options are also discussed, namely bull put spread and bear call spread, which are strategies where you are in receipt of premium, while executing the strategy. Time value of Options has always been a long-standing issue that directional option trading faces.
Theta decay as it is popularly called, has to be handled carefully or there could be serious loss in profits in option trading.
Iron fly or Iron condors are effective option trading strategies during range bound markets.
Option Spread are the basic combinations of many options. A spread position is entered by buying and selling options of the same stock or index on the same underlying security but with different strike prices or expiration dates.
Prasanna Jadhav is a certified options specialist with a wealth of knowledge and research in technology and financial markets. His knowledge of options trading and insights are very helpful , establishing himself as one of the top expert for acquiring insights into Equity Derivatives Trading.
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