Category: General
Capped Call - An Exotic Option Type
As an exotic type of option strategy, a capped call is designed to limit potential gains while managing risk. But what is a capped call, and how do capped call transactions work? From capped calls...
Exotic Options - What Are They and How Do They Work?
Exotic options are not your typical financial tools. These customized derivatives offer unique payment structures, flexible expiration terms, and distinct activation mechanisms. Primarily traded...
Can You Buy Options on Margin? A Look at the Main Rules Involved
Can you buy options on margin, and what rules apply? Understanding whether options are marginable and if you need margin to trade options can clarify your choices. This article breaks down key...
Options Arbitrage Strategies Explained (Low-Risk Trading Insights)
Options arbitrage offers traders a way to profit from market inefficiencies with minimal risk. But how do arbitrage option trading strategies actually work? This article deals with key options...
Stop Losing Money on Options with These 3 Tips
Losing money on options? You are not alone. Many traders struggle with this, often asking, “Why do I keep losing money on options?” The reasons often boil down to poor planning, weak strategies,...
Option Leverage - How It Works and Why You Should Know About It
Option leverage lets traders amplify potential gains while using less capital. By paying a small premium, you can control 100 shares—something that isn’t possible with stocks alone. This article...
Time Decay in Options - Does It Help or Harm Your Trades?
Time decay in options is a concept that you certainly don't want to ignore. The whole concept is rather intuitive (the closer you get to the expiry date, the more value your option loses), but...
Qualified Covered Calls: Simplifying Tax Rules for US Traders [With Scenarios]
Qualified covered calls can offer attractive tax advantages, but the rules can get tricky. How are covered calls taxed? It depends on expiration dates, assignments, and stock holding periods. This...
How Are Options Taxed in the US? The Facts You Need to Know
Figuring out how options are taxed in the US can get tricky. Taxes on options trading depend on factors like your strategy and whether you hold a long or short position. Are options taxed as...
Options Trading Fees - An Impartial Comparison Among Brokers
The fees you pay when trading options can greatly affect profitability. With option fees and services varying between brokers, choosing a broker exclusively based on who has the lowest options...