Monthly Archives: April 2023

Using options is a common strategy to offset risk in investing. Options are financial instruments that give the holder the right, but not the obligation, to buy or sell an underlying asset at a certain price (strike price) on or … Continue reading →

The importance of instrinsic value and time value of options … Buying out-of-the-money (OTM) options can be a tempting strategy because they are cheaper than at-the-money or in-the-money options. However, there are several reasons why buying OTM options is not … Continue reading →

There are several reasons why traders may fail to follow their trading strategies: Emotional trading: Traders may be influenced by their emotions, such as fear or greed, which can cause them to deviate from their trading plan. For example, they … Continue reading →

A covered call is a strategy in options trading that involves selling a call option on an underlying asset that is already owned by the trader. Here is how it works: The covered call strategy is often used by traders … Continue reading →

The choice between intraday and positional trading depends on your personal trading goals, preferences, risk tolerance, and market conditions. Here are some points to consider: Intraday trading involves buying and selling securities within the same trading day, while positional trading … Continue reading →

No, a losing trade does not necessarily make you a dumb trader. In fact, it is common for even the most experienced and successful traders to have losing trades from time to time. The key to being a successful trader … Continue reading →

Option writing, also known as selling options, is a strategy in options trading where an investor sells options contracts to another investor in exchange for a premium. This means that the option writer is creating an option contract and selling … Continue reading →

Option prices are strongly influenced by changes in volatility. The higher the volatility of the underlying asset, the more likely the option will move into the money and the more valuable it becomes. Conversely, low volatility reduces the chances of … Continue reading →

There are many successful options traders in the world. Some well-known names in the industry include: Blair Hull – He is a successful options trader and founder of Hull Trading Company, one of the largest market-making firms in the world. … Continue reading →

Traders can experience feelings of greed and fear due to the high-stakes and unpredictable nature of financial markets. Here’s a bit more detail on each: Greed: Traders may become greedy when they see the potential for high profits, and they … Continue reading →

Institutional traders and retail traders are two types of market participants with different characteristics, goals, and strategies. Institutional traders are professionals who work for financial institutions such as hedge funds, investment banks, or pension funds. They usually trade large volumes … Continue reading →

In options trading, intrinsic value and time value are two crucial components that determine an option’s price. Intrinsic value refers to the inherent value of an option based on the underlying asset’s current market price. It is the difference between … Continue reading →

Theta, also known as time decay, is a measure of the rate at which the value of an option declines over time as it approaches its expiration date. Theta is an essential component of options trading because it affects the … Continue reading →

Yes, a trader can certainly enjoy the magic of option trading, as it can be a highly engaging and potentially lucrative activity. Trading options requires careful analysis and decision-making, which can be intellectually stimulating and rewarding for many traders. Additionally, … Continue reading →

Beating institutional traders is a challenging task, but it’s not impossible. Here are some strategies that retail traders can use to potentially beat the big players: In conclusion, beating institutional traders is not easy, but it is possible. By focusing … Continue reading →

It’s difficult to make a blanket statement about whether retail traders are always losing to institutional traders, as there are many factors that can influence the outcomes of trading. However, there are some general trends that can be observed. Institutional … Continue reading →

There are several challenges that option traders face, but one of the biggest problems is managing risk. Options trading involves a high degree of leverage, which can magnify both profits and losses. Therefore, option traders need to be skilled at … Continue reading →

Reading an option quote can be intimidating at first, but with some practice, it becomes easier. Here’s a step-by-step guide on how to read an option quote the right way: In conclusion, reading an option quote requires understanding the underlying … Continue reading →

While options trading can offer opportunities for potential profits, it also involves risks, and getting rich solely through options trading is not guaranteed. Trading options can be complex and volatile, and it requires a solid understanding of the underlying assets, … Continue reading →

“The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.” This … Continue reading →

No, there is no strategy in the stock market that can guarantee that your money will never sink and only generate profit. The stock market is inherently unpredictable and volatile, and there are no surefire ways to avoid losses. All … Continue reading →

It’s true that many successful traders today have taken inspiration from the trading styles of past greats. This is because the principles of successful trading have remained fairly consistent over time, and there is much to be learned from the … Continue reading →

In trading, the maximum drawdown refers to the largest percentage decline in the value of a trading account from its highest point to its lowest point. It is an important metric for traders to consider because it can help them … Continue reading →

Jessi Livermore, the legendary trader says: “Don’t take action with a trade until the market, itself, confirms your opinion. Being a little late in a trade is insurance that your opinion is correct. In other words, don’t be an impatient … Continue reading →