Understanding the Options Chain with Allison Simpler Trading
What is option chain and how to use option chain?
An options chain, sometimes referred to as an option matrix, is a list of all possible option contracts on a certain securities. It displays all put and call options, their expiry dates, strike prices, and volume and pricing data for a single underlying asset over a specified maturity period. Typically, the chain will be classified by expiry date and divided into calls and puts.
Option chains are perhaps the most natural way for ordinary investors to get information. The option quotations are organized in a logical manner. Traders may determine the option premium by comparing the maturity dates and strike prices of the underlying options. Bid-ask quotes, or mid-quotes, may also be shown inside an option chain, depending on the data presentation.
Overview of this trading training course
When you first open the Option Chain, it may seem frightening because of the large amount of numbers, columns, and possible movement while the market is open. Allison will dissect all facets of the options chain in this Understanding the Options Chain course, leaving you with a better understanding of the option chain and how to trade it.
What does the course teach you?
On the Options Chain, the first thing a trader often observes are the common words used by Option traders: Call and Put. A Call is the option (but not the duty) to purchase a stock (bond, commodity, etc.) at a certain price and time period. A put option enables the owner of the stock (bond, commodity, etc.) to sell a certain quantity of their underlying at a specified price within a specified time period.
The rising row of numbers in the center of the Option Chain is the next element that catches a trader’s eye. These are referred to as Option Strikes. Strikes are the predetermined prices at which you are prepared to purchase (Call) or sell (Put) an underlying asset.
When a trader examines the Option Chain, the next item that may attract their eye are the horizontal drop down boxes that contain dates. These are referred to as expirations. When the trader clicks the drop-down box, a list of possible strikes for that date is shown. As a trader approaches the expiry date, their strike will begin to exhibit increasing intrinsic value, while the extrinsic value on the strikes will diminish. And it’s not all of what you will learn from the course Understanding the Options Chain.
Allison developed as a trader over the course of a decade of options trading by sharing her skills with our community. Her expertise trading and training others to trade is evident in her videos and blog postings. She has personally seen and experienced the ups and downs of trading.
Her objective is to assist traders in mitigating their losses so that their gains may outweigh their losses. Allison is adept at explaining complicated trading tactics and chart patterns to novice and professional traders alike. Her unique viewpoint on Capital Risk, the Chart, and the Option Chain may provide any trader with a fresh outlook on investing.
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