http://marketmomo.com Financial Commentary for the MoMo's Mon, 24 Nov 2008 18:41:50 +0000 http://backend.userland.com/rss092 en Strangles: A strangle consists of the simultaneous purchase (a long strangle) or sale (a short strangle) of a call and a put on the same underlying security with different strike prices and/or expiration dates. The example provide below is a Strangle with different strike prices with the same expiration. The ... http://marketmomo.com/2008/07/21/advanced-options-strangles/ Straddles: A straddle consists of the simultaneous purchase (a long straddle) or sale (a short straddle) of a call and a put on the same underlying security with the same strike price and expiration date. Below you see a quote screen for a Straddle. As a Buyer of a Straddle ... http://marketmomo.com/2008/07/20/advanced-options-straddles/ Spread: A spread position is a position consisting of two parts, each of which alone would profit from opposite directional price moves. As an order, spread involves the simultaneous purchase and sale of one or more option contracts of the same type (call or put) on the same underlying security ... http://marketmomo.com/2008/07/19/basic-spread/ LEAPS: This stands for Long-term Equity AnticiPation Securities, and are also known as long dated options. These options have a minimum expiration of 9 months to as long as 39 months. Currently, equity LEAPS have two series at any time with a January expiration. For example, in October 2004, LEAPS ... http://marketmomo.com/2008/07/18/leaps/ Besides buying the simple call or put, there are many other strategies one can use when trading in options. I will be providing some definitions below that are used by a popular online trading company as well as showing some screen shots of the different types of quotes. ... http://marketmomo.com/2008/07/17/alternatives-advanced-options-terminology/ The next set of terms are in-the-money (ITM), at-the-money (ATM), and out-of-the-money (OTM) options. To determine the money status of an option depends on which point of view we are to assume. If one is Long the option, we have purchased the option and will decide whether or not to ... http://marketmomo.com/2008/07/16/option-basics-part-4/ Call Option is the right to buy a stock at a certain price. The strike price is the price where the buyer of the option has the right to exercise, and thus, purchase the stock. The buyer of an option is generally bullish because a buyer believes the stock price ... http://marketmomo.com/2008/07/15/option-basics-part-3/ Premium is the actual cost of the option that the buyer of the option pays to the seller of the option. In some cases, the option may have both intrinsic value and time value. Expiration is the last day to either exercise the option or to close out one's option position. ... http://marketmomo.com/2008/07/14/option-basics-part-2/ Options are a type of derivative investment that allows one to either leverage or hedge assets. The main type of option available in the United States is an American Option. An American Option is different from a European Option, in that one can choose when to exercise the option. ... http://marketmomo.com/2008/07/13/alternatives-intro-to-options-terminology/