Advanced Options Trading
Advanced vanilla options training guides.
Looking for simple options training? Use our starter articles, then come back to the Advanced Training.
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The Greeks In Depth: Theta and Rho
Theta Theta is the sensitivity of an option’s value to the passage of time. It is usually expressed as the change in value per one day’s passage of time. Please Log... read more
The Greeks In Depth: Vega
Vega is the sensitivity of an option’s value to a change in volatility. It is usually expressed as the change in premium value per 1% change in implied volatility (IV). Pl... read more
The Greeks In Depth: Implied Volatility
Before reading more about the Vega, let’s begin with volatility. The volatility of an asset (currency pair, stock, or commodity) price is simply how much it fluctuates with no regard to directi... read more
The Greeks In Depth: Gamma
The Gamma is the rate of change of the Delta with respect to the movement of the rate in the underlying market. In the Sensitivity table, Gamma shows how much the Delta will change if the underlying r... read more
The Greeks In Depth: Delta Hedging
The Delta value indicates the option’s equivalent position in the underlying market. Hence, to hedge an option, you take the opposite position in the underlying market. For example, a GBP/USD Ca... read more
The Greeks in depth: Delta
Unlike a trade in the underlying whose value per point stays the same, the value of an option for every point’s movement in the underlying is constantly changing. The Delta can be used to measur... read more
Introduction to the Greeks: Theta and Rho
Theta The extrinsic portion of an option’s premium decays each day as the option gets closer to expiry. At expiry, the extrinsic value has completely decayed leaving intrinsic value only. Theta... read more
Introduction to the Greeks: Gamma and Vega
Gamma The Gamma reveals how much the Delta will change if the underlying market moves by 1%. This provides information on how the Delta will change as the market moves. A larger Gamma means the Delta... read more
Introduction to the Greeks: Delta
Unlike a trade in the underlying market whose value per point stays the same, the value of an option for every point’s movement in the underlying market is constantly changing. The Delta can be ... read more
Introduction to the Greeks
Now, it’s time to learn the Greeks and their super powers! The Greek values can be used to measure risk to find the best trading opportunities with easyMarkets options. The platform’s Sens... read more
Advanced mode: Covering a Sell Put Option
To cover a sell Put options, you would buy a Put option. If you place the strike of the buy Put trade below the strike of the sell Put to limit the risk as the market falls, you are trading a Bull Spr... read more
Advanced mode: How to Cover a Sell Option
When buying an option with easyMarkets, your loss is limited and your profit is unlimited. The opposite is true when you are selling an option. Your loss is unlimited and your profit is limited. The m... read more
Advanced mode: Selling Options
This lesson will teach you how to use the Advanced mode to sell options on the easyMarkets vanilla options platform. When you buy an option, you pay a premium to do so. If you are the seller of an op... read more
Trading Strategy: The Bear Spread
The bear spread strategy is a similar concept to the bull spread, but here you are trading an expected down trend through buying a Put and, simultaneously, selling a Put with a lower strike. Your tota... read more
Trading strategy: The Bull Spread
The bull spread strategy allows you to trade an expected rise in the underlying market and, at the same time, limits the loss and profit potential. To execute this strategy with easyMarkets, you buy a... read more
Trading Strategy: The Long Strangle
This strategy is used by easyMarkets options investors to trade an increase in volatility. It is very similar to the Long Straddle but the Call and Put have different strike rates. Here’s how to... read more
Trading Strategy: The Long Straddle
The long straddle is commonly used over news announcements and major economic events to trade an increase in volatility. To execute this strategy with the easyMarkets platform, you buy a Put and Call ... read more
Vanilla Options Trading Strategies
This lesson will teach you how to build option trading strategies. If you are not familiar with the process of buying an option, please refer to the lesson ‘Put and Call options’. The Adv... read more
Hedging Exposure to Currency Rate
Hedging currency rate exposure – exporters and importers Any company exporting and importing goods overseas will have currency rate exposure. This exposure could be on a future invoice to pay o... read more
Hedging an Open Forex Position
Hedging is to make an investment to reduce the risk of an existing investment which may be the result of adverse movements in the market. easyMarkets vanilla options are commonly used by private inves... read more
Net Present Value of an Option
Net Present Value (NPV) figures are an indication of what your option trade’s ‘premium now’ would be if the market moved. The indication is based on the current market environment. T... read more
Valuing the Premium
When trading easyMarket vanilla options, you are trading premium value. If you buy an option, you want to sell it in the future for a higher premium, and if you sell an option, you want to buy it back... read more
Status of an Option (‘moneyness’)
An option can be described as being in one of three states: In-the-money (ITM), at-the-money (ATM) or out-of-the-money (OTM). An option is in-the-money (ITM) when the strike rate is better than the... read more
