Tools and information for the new option trader http://www.optiontradingtips.com Thu, 19 Jan 2012 18:53:05 -0600 Thu, 19 Jan 2012 18:53:05 -0600 Trade Idea: NIFTY (NSE) Index Options Update 20th February, 2012 Position Type Strike Price Current P;amp;L -1 Call 5300 27.50 298.00 -13,525 +1 Call 5400 14.50 199.75 9,262.50 -1 Put 4700 45.00 0.75 2,212.50 +1 Put 4600 29.00 0.70 -1,415.00 Total P;amp;L -3,465.00 INR Update 17th February, 2012 Position Type Strike Price Current P;amp;L -1 Call 5300 27.50 235.00 -10,375 +1 Call 5400 14.50 143.50 6,450 ... http://www.optiontradingtips.com/trading/trade009.html http://www.optiontradingtips.com/trading/trade009.html Tue, 17 Jan 2012 21:26:37 -0600 Put Call Parity Call - Put = Stock;nbsp;- Strike Put Call Parity is a theorem that defines a price relationship between a call option, put option and;nbsp;the underlying stock. The conditions for the "official" theorem to hold true are; The options are of European style Identical strike price for both call and put options No brokerage or exchange fees (called a frictionless market) Interest rates remain constant until the expiration date The stock pays no dividends ... http://www.optiontradingtips.com/options101/put-call-parity.html http://www.optiontradingtips.com/options101/put-call-parity.html Mon, 16 Jan 2012 17:26:39 -0600 The Binomial Model The binomial model is a mathematical method for the pricing of American style option contracts (Option contracts that have a European exercise style will generally be priced using the Black Scholes Model). A binomial method for pricing derivatives was first suggested by William Sharpe in 1978, however, during 1979;nbsp;three academics formalized a framework for pricing options using a binomial method, which led to today's binomial model being referred to as Cox Ross Rubinst... http://www.optiontradingtips.com/pricing/binomial-model.html http://www.optiontradingtips.com/pricing/binomial-model.html Mon, 05 Sep 2011 20:40:25 -0500 What are Stock Options? Broadly speaking stock options can take on two forms - options that you trade electronically on a public options exchange and stock options that are granted by a company, which you can exercise in return for shares in that company. This article will explore the later, which are also referred to as Employee Options. Tradeable options (calls and puts) are generally referred to as Equity Options. Both stock and equity options are a financial asset known as a derivative. ... http://www.optiontradingtips.com/options101/stock-options.html http://www.optiontradingtips.com/options101/stock-options.html Mon, 10 Jan 2011 23:26:12 -0600 What are Currency Options? A Currency option (also FX, or FOREX option) is a financial product called a derivative where the value is based off an underlying instrument, which in this case is a foreign currency. FX options are call or put options that give the buyer the right (not the obligation) to buy (call) or sell (put) a currency pair at the agreed strike price on the stated expiration date. FOREX option trading was initially conducted only by large institutions where fund managers, por... http://www.optiontradingtips.com/options101/currency-options.html http://www.optiontradingtips.com/options101/currency-options.html Sat, 05 Jun 2010 09:00:00 -0500