The Sizzle Index is a feature on the thinkorswim platform that filters to find stocks that currently have an increase in the number of option contracts traded in relation to the last 5 days’ average of activity. The Sizzle Index is calculated as the ratio of the current total volume of put and call options …
Rolling options is the process of moving from one call strike price and expiration on a specific stock to a different call of a different strike price and expiration on the same stock. It entails exiting the current option contract and then entering a new position immediately after or at the same time . The …
Open interest and the volume traded in options are two different metrics that show the liquidity and trading activity of options contracts at different strike prices and expiration dates. Volume is the quantity of contracts traded in a period, while the open interest shows the number of contracts that currently exist and are active in …
Instead of searching for an options play structure every time you come across a potential option trade you want to make you can now simply refer to the below guides created by Gavin McMaster at OptionsTradingIQ.com you can also following Gav on Twitter at @OptionTradinIQ. Options traders at all trading levels can find having these …
Buy to open versus buy to close in options trading are very different processes that many stock traders don’t understand. A buy to open order in options trading is when a call or put contract is bought and entered as a long position. The term comes mostly from the fact that when the option seller …
A synthetic share of a stock is created by buying and selling stock options to simulate an options play that moves the same way that holding shares in the stock would move without the same amount of capital needed to buy the same amount of shares. A synthetic long stock position is created by buying …
The jade lizard is an option play that is created by opening a bearish vertical spread using call options and adding a put option sold at a strike price lower than the call spread strike prices. Using one underlying stock with the same expiration date, the jade lizard strategy buys a call option at one …
Option traders who believe the price of an underlying asset will not change significantly in the near future can sell short combinations of options that have different directional biases and strike prices. A short strangle is an option play designed to bet on a small move in either direction for an underlying stock in a …
The delta of a stock is always 1.00 because delta is the variance of movement of a stock versus an option contract. The delta of an option is the magnitude of the move in the underlier that the option will capture currently based on the odds of the option expiring in-the-money. Delta quantifies the amount …
Options are traded on contract markets and unlike stocks there is someone short and someone long every option at all times. Options are a zero sum market as there is always a winner and a loser in every price move. Someone has to write every contract and there must be a buyer and they both …
