Use for defining terms and concepts.
LandMines They’re hidden beneath the surface. When tripped, they cause a lot of damage, and usually it’s a surprise to the one who treads upon it. I use the analogy of LandMines in the sense that sometimes I place a series of short options in a sequence in front of where it looks like it’s …
Rolling Short Puts In this post I will share what it means to roll a short put. First of all, for those who don’t know, a short put is a position taken where the buyer (someone else in the market) gives the seller (in this case me) money to enter a contract. In this contract, …
Definitions I’ve grouped some of my basic interpretations and definitions of words I use in my lexicon. Some of these are real in the professional world, and some of them I have made up for my own beneft. Delta (▲ or ▼) – Delta tells you how much an option price is expected to …
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.