A covered call is one of the few options strategies that gets pitched to brand-new traders and run by institutions at the same time, and for good reason: it pays you income on stock you already own. The catch is that the same trade that hands you a premium today can cap your upside tomorrow,…
Knowing your breakeven price before you enter a trade is one of the simplest ways to make sharper decisions. Most options traders know the basic formula for a long call or put, but once you start trading spreads or multi-leg strategies, the math changes and many traders skip this step entirely. Here is how to…
If you want to become an options trader, you must understand call options! What is a call? Call options give the buyer the right to purchase 100 shares of stock at a specific price. The price that is agreed upon is known as the strike price. As an options trader, you can use calls to…
A strategy is useless if you lack conviction. What exactly is my SPX trading strategy? I replicate a long SPY portfolio by selling put options on either /MES, SPY, or SPX. Depending on the week, I use a SPY puts strategy and will generally sell to open about 1–2 contracts which are dependent on my…
tastylive is excellent for beginners to learn, but their strategies may not always be great in practice. tastytrade Review A brokerage built for options traders Use tastytrade’s options-focused tools, flexible order entry, and competitive pricing when you want a broker that fits an active trading workflow. Open a tastytrade Account tastytrade is one of several…
Create a trading system with positive expected value. What is Expected Value? The expected value of your trade plan is how much you will profit or lose based on statistics. The expected value is calculated by multiplying the probability of being right times the reward and subtracting this from the probability of being wrong times…
A cash secured put is one of the few options trades where getting stuck with the stock is often the plan. You sell a put on a stock you would be happy to own, set aside the cash to buy it, and collect a premium for the promise. If you can buy 100 shares, you…
If you trade options, then you probably understand why options are better than stocks. Stocks vs. Options When you purchase shares of a stock, you cannot adjust your position or cost basis. Of course, you can average down, but this is just adding more money to a bad trade to reduce your basis. If you…
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