Monday, I noted that: “The latest episode of CNBC’s Options Action featured a trade recommendation on Google (GOOG). With shares just below $470, the guest recommends a July 470 – 500 call spread at $7.50. In (register to read more …) [...]

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Pfizer (PFE) was down 22 cents to $15 midday Tuesday and the top trade in the name was a block of 6750 Dec 15 calls on the $1.39 bid. Looks tied to 675K shares at $14.99 and part of a (register to read more …) [...]

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A volatility chart tracks the volatility “level” over time for both historical volatility [HV] and implied volatility [IV]. It is a helpful visual aide because it makes it easy to compare HV with IV both currently and over time. Though (register to read more …) [...]

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Historical volatility (also called realized volatility or statistical volatility and often designated by “HV”) is the actual volatility realized by the underlying security, measured in terms of the magnitude of recent price movement. Specifically, HV is the annualized standard deviation (register to read more …) [...]

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Listed options contracts trade on one of seven exchanges. The table breaks down the options volume for each exchange for trading on April 27, 2009. The International Securities Exchange [ISE] and the Chicago Board Options Exchange [CBOE] are the two (register to read more …) [...]

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Knowing when to anticipate assignment is important when writing options and trading spreads. Assignment on many cash indexes only happens at expiration. That is, investors can only exercise “European style” cash index options at expiration (more on index options (register to read more …) [...]

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A “roll”, in options parlance, is simply a position adjustment where an investor closes out a position in one options contract and opens a similar position in another contract.

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Debit: The premium paid for an options contract. The funds are debited from the traders account. If an investor opens a spread by purchasing Long Call A and selling Long Call B, where the premium paid for a Long Call (register to read more …) [...]

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Triple Witching Day is the third Friday in March, June, September and December, which tends to see heavy volume, as it is the last trading day before the quarterly expirations of stock options, index options, and futures.

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OEX is the world’s first optionable index options contract. The CBOE listed options on the index is 1983.

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