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Trading Option Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits Dan Passarelli
Publisher: Wiley

Feb 22, 2010 - In short, options can be used effectively for a number of different purposes, including the three primary ones we will address in this book which cover using them: (1) to speculate in the market for profit, (2) to earn income and . Jul 7, 2012 - For example, if company BCI is trading at $38/share and the $40 call is selling for $2, with a delta of .50, the following would be true if all other factors remain constant: Understanding theta also drives us to selling our options at the ideal time, not too early and not too late. Jul 20, 2008 - For example, let's say that Dell Computer is trading for $22.50. It is helpful, however, to understand the concepts of how price, time and volatility play into the value of our option premiums and what that says about the nature of the underlying equities. 6 days ago - The jury is still out on whether this current bullish market can continue through the summer but regardless, now may be a good time to review a strategy that can take advantage of higher implied volatility even if it doesn't happen this week. Would have an intrinsic value of $2.50 ($22.50 – $20 = $2.50) because the option buyer can exercise his option to buy DELL shares @ $20 and then turn around and sell them at market for $22.50 thereby generating a profit of $2.50 per share. Brodsky 2008 9781576602461 15 Understanding Credit Derivatives and Related Instruments Antulio N. Ability to not only purchase them, but create them, together with so many components such as "the greeks" "time decay" "implied volatility" and so many other factors, make the number of option trading strategies and applications almost limitless. When others are fearful.” In his comments, Buffett concisely summed up the twin forces that drive markets: greed, which motivates buying, and fear, which motivates selling. The model takes into account a number of variables, including the length of the option contract, the stock price, interest rates and, most significantly, implied volatility. Nov 9, 2012 - Trading Option Greeks: How Time, Volatility, and Other Pricing Factors Drive Profit (. Option traders need to be prepared With the option premiums increased because of the implied volatility increasing, a trader decides to sell a bull put spread on XYZ, which is trading around $53 in this example. Apr 27, 2009 - 14 Trading Option Greeks—How Time, Volatility, and Other Pricing Factors Drive Profit Dan Passarelli and William J. Each of these variables, with the exception of volatility, is known to traders at any given point in time. Veteran options trader Dan Passarelli explains a new methodology for option trading and valuation.