How To Read Option Volatility Skew to Understand Future Expected Moves

As a follow up to our Introduction to Skew, we will dive deeper into what skew can look like for different types of tickers and under different scenarios. We will talk about the implications of what we see and how we can use this to improve our trading decisions. Key Takeaways What Does Skew Look […]

Introduction to Options Skew – A Game Changer for Option Sellers

When we look at the option chain for any given company, we have two primary dimensions that we can look across. The first is time, which is represented by the different expirations. The second is underlying price, which is represented by the different strike prices available on each expiration.  Both the expirations and the different […]

Implied Volatility Explained – The Lens Of Option Trading

As an option seller, the most important concept that we need to understand is called implied volatility. This is the concept that once understood will really start to move the needle on your option selling skills. The reason implied volatility is such an important concept is because options are volatility products. The reason they exist […]

Two Ways to Price Option Premiums: A Masterclass In Option Selling Strategy

The entire game of trading options is about pricing the variance risk premium that is embedded into the option price. If you are able to identify areas where the options are trading at a different price than what they should be, you have found a good trading opportunity. Most of the time, forecasting option prices […]

What is Theta In Option Selling – The Cost of Holding an Option Over Time

Theta is the greek that most option sellers are familiar with because it tells us about how much we are getting paid each day when we sell an option. Theta represents the daily loss in the value of an option due to the passage of time, assuming all other factors remain constant. Key Takeaways What […]

How to Trade Iron Condors – Ultimate Guide For Option Sellers

One of the hardest hurdles for retail traders to overcome when they look at the world of option selling is the idea of carrying the unlimited risk exposure that is technically a part of your position when you selling a straddle or a strangle. It makes sense that we would have a natural aversion towards […]

What Does Delta Mean In Options? – Controlling Direction When Selling Options

Delta is one of the option greeks that every option seller has heard of, but may not fully understand. It’s one of the most important concepts that option sellers have to be familiar with because we need to understand it in order to structure our trades correctly and manage them properly. Failing to understand how […]