Option trading strategies

option trading strategies


Day traders (market scalper) watch daily, hourly, five-minute and 1-minute price charts.



Swing traders begin by first examining weekly price charts. Then they move to shorter interval charts in which each candle represents one day, one hour, and finally several minutes. Swing traders may finally examine a 15-minute chart to see what the price has done over the past few hours.



Long-term traders study the same charts that buy-and-hold stock traders use--typically the monthly, weekly, and daily charts.



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Delta measures a change in premium value relative to a $1 change in the underlying stock.



Theta measures how much premium value is exiting with each passing day.



Vega is a measure of current implied volatility. The Vega value of an option reflects a change in the value of the option premium for each 1% change in underlying volatility.



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