Options

Overview

An option is a contract between a buyer and a seller that gives the buyer the right (but not the obligation), to buy or to sell an asset at previously set strike price, before the option’s expiration date. In return, the seller collects a premium from the buyer.

A call option gives the buyer the right to buy the underlying asset, while a put option gives the buyer of the option the right to sell it. If the buyer chooses to exercise this right, the seller must sell or buy the asset at the agreed price. The buyer may choose not to exercise the right and let the option expire. The underlying asset can be property, securities (stocks or bonds), or derivative instruments, such as a futures contract.

Articles

Put Options Explained For Laymen: This article explains basic put options in layman’s terms.

A Brief Outline of the Uses of Options and How They Work: What can a normal stock trader or investor use options for?

Stock Options Are Not Risky!: The words “derivative” and “stock option” have become synonymous with “high risk” in the public mind. This is an unfounded belief. Worse still, it is an unfortunate situation because the truth is that stock options can significantly reduce risk within your investment portfolio.

Techniques and Strategies in Options Trading: Options concepts and strategies, including credit spreads, derivatives, stock options, debit spreads, vertical spreads, options strategies, iron condor, butterfly spread.

Options: Resources

Options University: Options University has just one goal – to teach you the RIGHT way to trade options. Most other options trading education companies are going about it all wrong. They simply teach THEORY and STRATEGIES… things you could glean from a good textbook. Options University teaches students: 1) How to find the opportunity first, THEN 2) Apply the proper strategy appropriate to that opportunity. Get the unfair advantage: Options Trading with Options University.

Terry’s Option Strategies: 196% gain in 1 year! Harvard Biz School grad and Stock Option trading veteran Dr. Terry Allen shares his profitable strategies. IRA-friendly. White Paper and Options Tutorial Program.

Cashflow Heaven: Your own personal cashflow machine with options strategies designed to produce passive income for you every month—automatically. Free weekly options newsletter.

Futures Options: Learn to trade options like a pro, using Delta Neutral, Calendar Spreads, Option Scale Trading and other Option Secrets Revealed for the First Time.

OptionSmart: Use technical analysis to find attractive options trading opportunities within 70 market dimensions – a total of 100+ option picks per day.

CallWriter Real Time Options: The ultimate site for calls and puts. CallWriter offers the web’s only real-time lists of the highest returning covered calls, naked calls and naked puts, the web’s best daily covered call picks (with analysis) and the web’s only position management calculator.

optionsXpress: Forbes’ favorite option site.

OptionVue: Options analysis and trading software.

CBOE: Chicago Board Options Exchange.