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 […]
Option contract prices will increase as the probabilities of them expiring in-the-money are greater and will go down as the probabilities of them expiring in-the-money decreases. As options get closer to being in-the-money they capture more of their underlying assets move, as they get farther away from being in-the-money they capture less of their underlying
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Option trading can be explained as buying or selling a contract with the expectations of making money before the option expires. An option buyer wants an option to go higher and be able to sell it for more than they bought it for before expiration or have it exercised with intrinsic value for more than
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