Introduction When trading options, implied volatility (IV) and strike price work together to shape your potential profit, premium cost, and risk exposure. Misunderstanding this relationship can lead to overpriced trades or missed opportunities. In this guide, we’ll explain how implied volatility impacts strike price selection—and how to use it to your advantage. What Is Implied…
Introduction One of the most important pricing factors in options trading is the strike price. It plays a major role in determining how much you’ll pay (or receive) for an options contract. In this guide, we’ll explain how the strike price affects the options premium, and what it means for your trading strategy. What Is…
Introduction When trading options, understanding whether a contract is in-the-money (ITM) or out-of-the-money (OTM) is essential. These terms directly relate to the strike price and the current market price of the asset. In this guide, we’ll explain what ITM and OTM mean, how they impact your options strategy, and when to use each. What Does…
Introduction Selecting the best strike price for a put option is essential if you’re looking to profit from downward moves in a stock or hedge your portfolio. In this guide, we’ll help you understand how to choose the ideal strike price depending on your goals, whether you’re bearish on a stock or protecting long positions….
Introduction Selecting the right strike price for a call option can make or break your trade. Whether you’re aiming for conservative gains or taking on more risk for higher rewards, the strike price plays a crucial role in shaping your outcome. This guide will walk you through the key factors to consider when choosing a…