options strategies and greeks
Educational articles in this subcategory.
Vertical Spreads: Bull and Bear Structures
# Vertical Spreads: Bull and Bear Structures Vertical spreads combine a long option with a short option at different strikes but the same expirat...
Vega Exposure to Implied Volatility Changes
# Vega Exposure to Implied Volatility Changes Vega measures how much an option's price changes when implied volatility (IV) moves by one percenta...
Using Delta as a Hedge Ratio
# Using Delta as a Hedge Ratio Delta measures an option's sensitivity to changes in the underlying price and serves as the foundation for hedging...
Theta Decay and Time-Based Trades
# Theta Decay and Time-Based Trades Theta measures the daily loss of value in an option due to the passage of time. For option buyers, theta repr...
Straddles and Strangles for Volatility Bets
# Straddles and Strangles for Volatility Bets Straddles and strangles are volatility strategies that profit from large price movements in either ...
Rolling Strategies Pre-Expiration
# Rolling Strategies Pre-Expiration Rolling involves closing an existing options position and simultaneously opening a new one, typically at a di...
Risk Reversals and Synthetic Positions
# Risk Reversals and Synthetic Positions Risk reversals and synthetic positions use options to replicate or approximate the behavior of stock own...
Rho and Interest Rate Sensitivity
# Rho and Interest Rate Sensitivity Rho measures how much an option's price changes when interest rates change by one percentage point. While typ...
Ratio Spreads and Backspreads
# Ratio Spreads and Backspreads Ratio spreads and backspreads use unequal numbers of long and short options to create asymmetric risk/reward prof...
Protective Puts and Collars
# Protective Puts and Collars Protective puts and collars provide downside protection for long stock positions. The protective put establishes a ...
Position Greeks vs. Individual Leg Greeks
# Position Greeks vs. Individual Leg Greeks Multi-leg options strategies create complex risk profiles that differ from any single leg. Aggregatin...
Iron Condors, Butterflies, and Variations
# Iron Condors, Butterflies, and Variations Iron condors and butterflies are multi-leg strategies designed for range-bound markets. They profit w...
Horizontal and Diagonal Spread Construction
# Horizontal and Diagonal Spread Construction Horizontal (calendar) spreads and diagonal spreads use options with different expiration dates. The...
Glossary: Options Strategy Terms
# Glossary: Options Strategy Terms This glossary provides concise definitions for options strategy concepts, Greeks, and trading terms. Terms are...
Gamma and Managing Convexity
# Gamma and Managing Convexity Gamma measures how fast delta changes as the underlying moves. It represents the convexity of an option's payoff—t...
Event-Driven Volatility Trades
# Event-Driven Volatility Trades Beyond earnings, numerous scheduled events drive volatility in specific stocks or the broader market. FDA decisi...
Earnings Season Options Playbooks
# Earnings Season Options Playbooks Earnings announcements are among the most significant events for options traders. Implied volatility typicall...
Covered Calls and Cash-Secured Puts
# Covered Calls and Cash-Secured Puts Covered calls and cash-secured puts are foundational income strategies that involve selling options against...
Calendar Spreads for Income Generation
# Calendar Spreads for Income Generation Calendar spreads exploit the faster time decay of near-term options versus longer-term options. By selli...
Adjusting Options Trades Mid-Course
# Adjusting Options Trades Mid-Course Options positions rarely work out exactly as planned. When the underlying moves against you, time passes, o...