# Trading Summary

## Update July 3rd

BTU closed the week out at $1.87. The put spread expired at its' max value, less the premium paid leaves a profit after 5 contracts of $117.50.

MU closed the week out at $19.07. The put spread expired at its' max value, less the premium paid leaves a profit of $71.40.

RAD closed the week out at $8.39, below the $8.90 upper limit. Both calls expired worthless so the spread was profitable by the premium received when establishing the trade of $92.

# Using the Delta to Hedge Options

Delta measures the theoretical change to the value of an option as the underlying changes. This means the option's value is tied to the underlying by the amount of "delta" the option theoretically has. Traders can then offset the risk of the opiton by trading an appropriate amount of shares in the underlying security

# Pricing Options with the Binomial Model

The Binomial Model is the model of choice for American styled options - that is, those options where you can exercise any time up until the expiration date. Even though Black and Scholes was the original option pricing model, the Binomial Model is probably more widely used than B&S.

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# Option Pricing

There's lots of programs out there that will charge you a monthly fee for a calculator that prices up option contracts. Not here!

I've put together a little something in Microsoft Excel that just does this, plus prices up all of the Option Greeks.

# Option Combinations

Browse our comprehensive dictionary of option combination strategies. Learn how option combinations give you the ultimate flexibility with your investment decisions.