Author Archives: tradingwithbrenon

What is Fair Value?

Fair value is a measure of a product or asset’s current market value. Fair value is determined by the price at which an asset is bought or sold when both the buyer and seller freely agree on the price. Buyers and sellers compare the prices of comparable assets, look at the growth potential of the asset,Continue reading “What is Fair Value?”

Trading Strategies

Options Trading Strategies Covered call strategy or buy-write strategy: Stocks are bought, and the investor sells call options on the same stock. The number of shares you bought should be identical to the number of call options contracts you sold. Married Put Strategy: After buying a stock, the investor buys put options for an equivalentContinue reading “Trading Strategies”

Trading tips

Options trading tips Investors do not have to become a professional at reading financial statements to master a few fundamentals. Using long term trend summaries is sufficient. What to do before the expiration date Yon can exercise the option You can sell the option You can do nothing, allowing the in-the-money option to be automaticallyContinue reading “Trading tips”

Trading tips

Options trading tips Leverage is generally not conservative because it involves borrowing money to invest. Options are the exception, a form of leverage that does not involve borrowing. Time value (time decay) is  a depreciating  form of price, and the closer the option is to expiration, the faster it decays. Margin for options is notContinue reading “Trading tips”

Different types of options

Describing How These Options Differ From Equity Options -Stock Index Options An index option ( or stock index option) is an option that is based on a stock index or other financial index. All index options are cash settled, meaning there is no delivery of  the underlying stocks in the index. Almost all index optionsContinue reading “Different types of options”