Category: Options Trading

  • What is a covered call?

    The main idea behind a covered call is that you don’t expect the stock to move much in price. You expect it to stay within a range, what you own it at and the strike price you’re selling it at. If the price of the stock goes above the strike price you sold, you will […]

  • What is a poor man’s covered call?

    What is a poor man’s covered call?

    They’re a good tool to keep consistent cash flow They’re not hard to understand or super risky It’s possible to generate comparable cash flow as with a regular covered call when done correctly. Let’s describe the poor man’s covered call A poor man’s covered call (aka PMCC) is when you buy an in-the-money call with […]

  • What is Vega in options trading

    What is vega? Volatility generally benefits options, although some options more than others. Vega is a metric that measures an option’s volatility sensitivity – how much the option premium will change if implied volatility rises by one percentage point and other variables stay the same. Vega isn’t a Greek letter, like delta, gamma, theta, or […]

  • Bear call spread strategy, goal and profits

    Main goal To make money when the price action goes from neutral to bearish in any underlying stock. Explanation of a bear call spread A bear call spread is a type of options strategy in which you sell one short call for less than the current market price and buy one long call for more […]