Before we go into vertical options spread, we need to understand what a spread and an option spread are. A spread is a measure of the difference between two different stocks, yields, prices, or interest rates. An option spread is purchasing two or more options of the same class and the same security but with … Read more
What is Arbitrage? Profit from Arbitrage means purchasing an asset in one market at a lower price and simultaneously selling the same in another market at a high price. The arbitrage profit earned by the trader is equal to the resulting difference between the prices. The Arbitrage strategy is common in blockchain trading and the … Read more
Introduction The dividend discount model, also known as the Gordon Growth Model, is used to determine a stock’s intrinsic value based on a future series of dividends that grow at a constant rate. It is a popular and straightforward variant of the dividend discount model (DDM). This method disregards current market conditions. Companies belonging to a diverse … Read more
Neophyte and even experienced investors are often wary of options trading. Many people view options as risky, exotic, and only for investors with large bankrolls. However, nothing could be further from the truth. Options are excellent for investors, regardless of experience or risk tolerance, to expand their portfolios and make money in the stock market—whether … Read more
Synopsis Market volatility is the biggest scare for any trader in the market. While several options strategies are discovered to tackle the risk associated with the ups and downs of the market, traders still seem to fret at the suggestion of using option strategies. Hence, here, we are going to discuss one such option strategy … Read more
A long diagonal spread with puts is an options strategy created by buying a long term put having a higher strike price and selling a short term put having a lower strike price. This strategy is used to profit from neutral stock price action at the strike price. The maximum profit that can be realised … Read more
The options trader uses the bull put spread options strategy when having moderately bullish expectations on the market or stock. Under this strategy, the trader buys and sells the same asset’s put options with the same expiry date but with different strike prices. Also, this strategy involves limited profit and limited risk. It is pretty … Read more
What is a Long Call Option Strategy? The long call option strategy is a one-leg strategy, which consists of buying call options. A trader buys a call option because he is bullish on the underlying stock. He bets that the underlying security will move above the strike price before the expiry of the contract. With … Read more
The options trader uses the bear call spread options strategy when having moderately bearish expectations on the market or stock. Under this strategy, the trader buys and sells the same asset’s options with the same expiry date but with different strike prices. This strategy involves limited profit and limited risk. Features of Bear call spread … Read more
A long butterfly option with puts consists of two short puts at the middle strike and one long put, each at a lower and a higher strike price. The upper and lower strikes(wings) must be equidistant from the middle strike(body), and all the options must have the same expiration. This strategy is used when investors … Read more
