Are You Consistently Killing The Markets?
Before you trade…can you answer these 3 vital questions?
1. Who is in control of the market?
2. Where do I want to trade?
3. How do I want to get positioned?
Join us and see how trading from a place of strength using killer trade zones in the market totally changed our trading.
If YOU Trade, we will show you one of our favorite go to trades!
Would you like to…
- Increase your leverage without paying margin rates?
- Profit from dropping prices – with limited risk?
- Generate more income in your account?
- Get paid to enter long stock positions?
- Insure your positions or even your whole portfolio?
Options are exceptionally versatile. You can do all of the above with the use of options.
In exchange for the right to buy (“call”) or sell (“put”) an underlying security on or before the expiration date, the purchaser of an option pays a premium. The price of the contract is known as the debit, and it is the purchaser’s maximum risk. On the other side of the trade, the seller of the option receives the premium as a credit to his/her brokerage account, but is obligated to buy (in the case of a short put) or sell (in the instance of a short call) the underlying shares if the purchaser exercises the contract. Brokerages hold cash from the premium as a guarantee against short positions.
The strike price, or exercise price, of an option determines whether that contract is in the money, at the money, or out of the money. If the strike price of a call option is less than the current market price of the underlying security, the call is said to be in the money because the holder of the call has the right to buy the stock at a price which is less than the price he would have to pay to buy the stock in the market. Likewise, if a put option has a strike price that is greater than the current market price of the underlying security, it is also said to be in the money because the holder of this put has the right to sell the stock at a price which is greater than the price he would receive in the market. The converse of in the money is, not surprisingly, out of the money. If the strike price equals the current market price, the option is said to be at the money.
| Call | Put | |
|---|---|---|
| In the money (ITM) | Strike price < Stock price | Strike price > Stock price |
| At the money (ATM) | Strike price = Stock price | Strike price = Stock price |
| Out of the money (OTM) | Strike price > Stock price | Strike price < Stock price |
The post Are You Consistently Killing The Markets? appeared first on Live Trading News.