Category Archives: Option Pricing

Discusses how options are priced

Putting on a Different Kind of Option Contract


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[responsivevoice_button rate=”0.9″ pitch=”0.5″ volume=”0.8″ voice=”US English Female” buttontext=”Play”] So far, our focus and example trades have involved call contracts. I’ve displayed my preference for vertical spreads over naked options, and the spreads we’ve looked at have been credit spreads, which … Continue reading

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So You’re Telling me There’s a Chance


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[responsivevoice_button rate=”0.9″ pitch=”0.5″ volume=”0.8″ voice=”US English Female” buttontext=”Play”] We might say that we got lucky on our SPY trades. But how lucky? Did we beat the odds? Or did the odds favor us? How can we tell? Can we explain … Continue reading

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Extrinsic Value: Nailing Jelly to a Wall


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[responsivevoice_button rate=”0.9″ pitch=”0.5″ volume=”0.8″ voice=”US English Female” buttontext=”Play”] Keeping up with the value of an option can be challenging. You’ve got the intrinsic value, which changes as the stock’s market value changes, and you have extrinsic value, which at first … Continue reading

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Telling the Future


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[responsivevoice_button rate=”0.9″ pitch=”0.5″ volume=”0.8″ voice=”US English Female” buttontext=”Play”] Last week we tracked an imaginary ITM long call at a strike price of 170 with a DTE of 19 AUG 22. In trader shorthand we might identify the contract as .AAPL220819C170. … Continue reading

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