Use for defining terms and concepts.
Wrecking Ball Strategy Sometimes when I get excessively “short” or “long” on something, I end up needing to use a special strategy, or a tool, to get things back in line, or back to where I want them to be. I call it the “wrecking ball.” How it can form is, I allow a few …
Visualize Positions I am a very visual person, and I need to see how things are plotted out on charts, and graphics to truly grasp what is going on. For this reason, I set out to create my own tools that can help me “see” what is going on from different perspectives. One regret I …
What if Scenarios What if this happens? What if that happens? These are questions we should be asking prior to making any deals and selling contracts. We need to know the ramifications should the price go one way or the other, and a rough idea of how much it could gain or cost, and would …
Being “long on a stock” means that you own shares of that stock, with the expectation that its price will increase in value over time. Ownership: When you go long, you are actually purchasing and holding the shares of a company. You become a shareholder. Bullish Outlook: This position reflects a “bullish” outlook, meaning you …
Θ THETA Theta (Θ), often called “time decay,” is an options greek that tells you how much an option’s price is expected to decrease each day due to the passage of time. Options lose value every day, even if the underlying stock doesn’t move. Theta Θ quantifies this daily loss as a number. It’s like …
▲ DELTA In simple terms, ▲ Delta tells you how much an option’s price is expected to change for every $1 move in the stock price. Call Options (positive Delta): For call options, Delta ranges from 0 to 1. A Delta of 0.50 means that if the underlying stock goes up by $1, the call …
Here are some definitions of the terms I use frequently to describe strategies, or parts of strategies.
REALIZED GAINS When you have completed the cycle of buying, then selling any instrument whether that be a stock, option, piece of land, or a bicycle, the resulting gain or loss can be referred to as your “realized gains.“ With our investment portfolio, these can accumulate over time across several stock symbols, several days, weeks, …
The Bag – Are you caught holding the bag?