1. Strike Price – if the stock price don’t move beyond the strike price, then the option will expire worthless 2. Time to Expiration (time decay) – the longer the time, the higher the option price – the most time decay happens as option is near expiry 3. Effect of Interest Rate on short- term options prices…
Tag: deriva
Option Strategy – Long Stock; Stock UP/ DOWN since Purchase – what next?
Long Stock, Stock UP since purchase Next steps 1. Take no action – monitor price and change strategy if price outlook sours 2. If want to sell at my Target Price –> write Covered Calls – look for Strikes = stock target price, short time to expiration, high option premium –…