An In-depth Guide to the Theta Gang Wheel Strategy
Not long ago this blog featured different trading strategies that utilize the Theta Gang mindset of selling options for premium. One strategy in particular that is becoming much more mainstream in the options trading world is “The Wheel Strategy”. This strategy utilizes selling options to collect weekly premiums while keeping a very low risk profile. […]
What is High IV in Options and How Does it Affect Returns?
As you have learned from previous posts, trading options is buying the ability to buy or sell a stock at a certain strike price. A call option means you are bullish on the stock and a put option means you are bearish on the stock. Stocks can naturally move up and down on their own […]
Taking Worst Case Scenarios of Selling Covered Calls – It’s Not That Bad!
While I am new to the options game myself, I have learned quickly that options are like stocks, but on steroids. In this article I’m going to cover a simple options strategy, selling covered call options. Before diving too deep, please make sure to read our Trading Options for Beginners Guide to familiarize yourself with […]
4 Popular “Theta Gang” Strategies to Collect Premium from Options
What is theta gang? Simply put, these are options trading strategies that capitalize on the fact that the prices of options decay over time. Instead of trying to predict if a stock will go up or down, you simply play the time game– collecting premium which turns to profit as time goes by, then rinsing […]
My Bag Holder Experience in Tesla — Seeing -55% Disappear in 25 Minutes
A bag holder is a stock market sucker. This is an investor who buys a stock, hoping it goes higher, but then gets caught “holding the bag” as the stock eventually crashes. For some reason, we investors like to believe we’re never the bag holder of a stock, and never will be. I’m ashamed to admit […]
How Options Time Decay Destroys the Prices of Calls and Puts
Options time decay can be one of the most insidious forces to lose you money as you buy call and put options. As I mentioned in my options for beginners guide, time decay (known as theta) erodes the price of an option over time and is the primary reason why an investor would take the […]
How to Trade Options: A Beginner’s Guide to the Risks (and Rewards)
Table of Contents [Click to Skip Ahead] Intro to Options The Two Most Basic Options Contracts The Options Killer: Time (Theta) How to Create a Safe Income Stream from Options How to Calculate Potential Profit and Loss on Any Call or Put Other Strategies and Important Risk Management The Martyrs of Options Trading and Their […]
Selling Covered Puts for Great Premiums: It Doesn’t Have to Be Risky
Getting down to the basics of selling covered puts really helps the options trader conceptualize the risks and reward profile behind the trade. The big risk for the seller of covered puts comes down to this: If the buyer of a put option has the option to put their shares on someone else, then the […]
Pyramiding Your Protective Calls and Puts When Trading in a Trend
As I mentioned in my Trading Options for Beginners post, I’ve been dabbling with quick day trades with options, and using a protective call or protective put to shield against a reversal. I took the protective call one step further by pyramiding this protection and giving myself exposure to upside potential after already exiting my […]
Stocks Vs Options: What Beginners Need to Know
If you haven’t already, you’ll quickly discover the sexy, fast moving counterpart to stocks — options. It’s hard not to stumble upon these shiny derivatives. Brokerages constantly pitch them as a quick way to massive returns. (They’re also a quick way for the brokerage to generate commissions for itself.) “Options can double, triple, or even […]
