Back 2 Basics – Optionology

Lesson 1 – History of Options

2011-11-18T14:10:00-05:00November 18, 2011|

The US options exchange started with the founding of the CBOE (Chicago Board Options Exchange) in 1973.  At the beginning there were a total of 16 equities that had only call options.  In 1977 they began to trade put options.  There are now over 5 different exchanges actively trading options. [...]

Lesson 2 – What Does an Option Look Like?

2011-11-18T14:08:20-05:00November 18, 2011|

An option gives the buyer the right to buy or sell the underlying at a specified price and time.  At the same time, the seller has the obligation to take the opposite side and fulfill the option upon exercise.  That means that the buyer can choose if they want to [...]

Lesson 3 – Common Definitions

2011-11-18T14:00:00-05:00November 18, 2011|

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 [...]

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