A synthetic covered call is an options strategy aimed to mimic the benefits of a traditional covered call, but without actually owning the underlying stock. It’s created by selling a put option, which generates income…
Notional value and market value are both used to describe the value of a security. At a glance, notional value paints a picture of an investment’s total exposure while market value reflects the present-day value…
Backwardation is a scenario in the futures market where the spot price (or current market price) of an asset is higher than its future contract price. This suggests the market expects the asset’s price to…
Naked options are a type of options trading strategy where the investor sells options without owning any of the underlying assets. The term ‘naked’ implies the absence of coverage if the market moves against the…
Understanding the Basics of Options Before diving into the world of options selling, let’s grasp the basics. What are Options? An option is a contract that provides the buyer with the right, but not the…
