In options trading, the extrinsic value of an option represents the portion of the option's price that's based on factors other than the immediate value of exercising it. Also known as “time value,” ...

The Nations NDX PutWrite Index sells fully-collateralized put options in order to generate superior risk-adjusted returns. It has succeeded with risk-adjusted returns which are superior to the ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...

Implied volatility, time decay, and delta all play crucial roles in option prices As you may well be aware, it's very common for option players to close out their trades without ever touching the ...

Options trading can often be complex, but understanding how these financial instruments are priced is crucial for anyone diving into this market. Options derive their value from an underlying asset, ...

As you may well be aware, it's very common for option players to close out their trades without ever touching the underlying equity. In other words, they're not looking to acquire or sell the ...

Options can be used to express specific trading views, but before diving into options trading, you must understand how an option premium works — a vital component that can make or break your trading ...

A stock option is a contract that gives you the right to buy or sell a stock at a certain price in the future. Stock options can be used to hedge against potential losses in your portfolio. Employee ...

What Is a Call Option? A call option is a contract that gives the buyer of the option the right to purchase a security, such as a specific stock, at a specific price (referred to as the strike price).

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Delta is a measure related to options that traders can use to predict option price movements based on the change in the underlying asset. It can also be used to assess the probability that a given ...