SteadyOptions Trading Blog

During a discussion about my trading system, the question arose regarding the ability to exit positions entirely and mitigate substantial drawdowns during a crash-style event. This particular circumstance has caused concern about the effectiveness of the trading method. The common response to such concerns is often centered around the concept of maintaining a properly diversified portfolio.

Options can be an extremely useful tool for short-term traders as well as long-term investors. Options can provide investors with a vehicle to bet on market direction or volatility, and may also be used to collect premiums. A long options position is simple to use, and has defined risk parameters.

We are pleased to announce that Market Chameleon is offering SteadyOptions members a 2 week free trial for their premium tools. Market Chameleon is a premier provider of options information, using both stock fundamentals data as well as options analytics to provide better insight for those who wish to make informed investment decisions.

Everyone should be investing. After all, there’s no better way to increase your retirement savings and boost your spending power than by putting your money to work. Many people believe that investing is something that only wealthy people or financial experts can do, but that’s not the case.

The bull call spread is a simple strategy that can be used by novice options traders to bet on higher prices. Options can be an extremely powerful tool in the trading arsenal of those that know how to use them, and long options positions can be used to bet on a market rise or decline, with limited risk and potentially unlimited profit potential.

The option strike price (also known as the exercise price) is a term used in options trading. Options are derivatives. These financial instruments are ‘derived’ from another underlying security such as a stock, and give the right (but not the obligation) to buy or sell the underlying at some point in the future.

Growing a small trading account with options can be a challenging task, but it is definitely achievable. When I began my journey in trading options, my goal was to double my small account every three months. However, I quickly learned that taking excessive risks without proper risk management would only lead to starting over again and again by adding new funds to my account.

Trading volume and open interest are two parameters used to describe activity and liquidity in the options market. Trading volume measures the number of options contracts traded during a specified period and open interest measures of the number of open option contracts in the market at any time.

I'm often asked if 5% is a good return for an options trade. The answer is: it depends. One of the myths of options trading is that you should aim for at least 100% gain in each option trade, otherwise it is not worth the risk. Is it really the case?

Investors that are looking to make longer-term bets may use LEAP Options. They are functionally identical to most other listed options, except with longer times until expiration. These contracts are ideal for options traders looking to trade a prolonged trend.

Options trading has many advantages over stock investment. They are flexible, can be used to manage risk and are capital efficient. But there are also several key disadvantages. Here's our guide to the pros and cons of options trading.

Options are derivatives that allow investors to exchange the right to buy or sell a specific security at a specific price. We've seen before exactly what options are, how they work and their function. Here we go further and explore the two main flavour of options (at those traded on the open market): puts and calls.