The Basics: What is an Option?

I recently posted an article, “Why Trade Options?” in which I explored the merits of trading derivatives. In this article, I will explore the basics of option contracts and define the related terminology. An option represents a contract between a buyer and a seller. The buyer (or owner) of the contract has the right, but…

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Weekend Portfolio Analysis (February 28, 2015)

Market Conditions This week the market continued to trade in a very narrow range with the SPX opening the week at 2109.83 and closing lower on Friday at 2104.5, down 5.33 or 0.25% for the week. Data released on Friday showed that economic growth had slowed more sharply than originally thought in the fourth quarter of 2014. However, the S&P 500 posted…

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SPX Feb4 2040/2015 Credit Put Spread

The Weekend Portfolio Analysis on February 7, 2015 briefly mentioned that I have been experimenting with some weekly SPX credit spreads. Today I tweeted another SPX weekly trade that I placed. I just sold an SPX 2040/2015 credit put spread for $0.40. See all my trades at http://t.co/eLHQ7CrgUP pic.twitter.com/yVgZhjSns9 — Aram Basmadjian (@abasmadjian) February 23,…

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Why Trade Options?

Options trading is becoming one of the fastest growing segments in the financial markets. This is evidenced by the growth in options-related products available for trading as well as the exponential increase in trading volume on the various options exchanges.  Exchange-traded options were first offered in 1973. In 1999, the volume of options traded on…

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Weekend Portfolio Analysis (February 21, 2015)

Market Conditions This week the market traded in a fairly narrow range until Friday when it advanced to another all-time high. The SPX opened the abbreviated week on Tuesday at 2096.47 and closed Friday at 2110.3, up 13.83 or 0.7% for the week.  Despite the drop of crude oil prices on Friday, the market reacted positively to…

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