In-the-Money (ITM): For a call option this means that the underlying is trading above the strike price. For example ABC is trading at 30 and the call option has a strike price of 25. This call option is ITM. For a put option this means the underlying is trading below [...]
SPX forming a nice flag as the bulls and bears fight for control of this market. We've bounced nicely off the bottom of the flag. Question now is do we bounce back to the top or break down below it?
Name: Long Call Description: The long call gives the buyer the right to purchase the stock at the strike price. Â You want to buy a call if you believe the price of the underlying is going to go up. Â Calls offer insurance over buying the stock outright since you can [...]
Name: Long Put Setup: Buy (long) a put Bias: Bearish  […]
Name: Short Call Setup: Sell (short) a call Bias: Neutral to Bearish  […]
Name: Short Put Setup: Sell (short) a put Bias: Neutral to Bullish  […]
Name: Covered Call Setup: Sell (short) a call and Own or Buy (long) equal amount of shares Bias: Neutral to Slightly Bullish (If the underlying sky rockets in price you will be forced to sell at the strike price missing out on the extra gains)  […]
Name: Collar Setup: Own the stock and Sell (short) a call and Buy (long) a put Bias: Neutral to Slightly Bullish (If the underlying sky rockets in price you will be forced to sell at the strike price missing out on the extra gains)  […]
Name: Bull Call Spread or Vertical Spread Setup: Buy (long) Strike A call and Sell (short) Strike B call – same expiration month for both Bias: Bullish with a target at the short strike  […]
Name: Bear Put Spread or Vertical Spread Setup: Buy (long) Strike A put and Sell (short) Strike B put – same expiration month for both Bias: Bearish with a target at the short strike […]
 Name: Bear Call Spread or Vertical Spread Setup: Sell (short) Strike A call and Buy (long) Strike B call – same expiration month for both Bias: Neutral to bearish  […]
Name: Bull Put Spread or Vertical Spread Setup: Buy (long) Strike A put and Sell (short) Strike B put Bias: Neutral to Bullish  […]
