Option Trading Blog

Investing and Option Trading Tutorial

This should be a required reading if you want to get into trading and speculation. You don’t have to read everything in it or at the order I recommend. But bear in mind it would only benefit you.

It’s best to start with a few financial concepts. I recommend starting reading about the concept of the Efficient Market Hypothesis. Just trust me on this one. Although it may sound trivial, people make A LOT of mistakes by not understanding this. Here are some articles I wrote for you:

• Efficient Market Hypothesis

• Semi Strong Efficiency

• Weak Form Efficiency

After you read some topic about Market Efficiency, the next articles would make it clear why you are better off not trusting financial analysts or invest in funds:

• A Monkey Plays The Stock Market - Do Funds Do The Same?

• Where Are The Customers Yachts? Who Makes Money On Wall-Street anyway?

• Fools of Prophecy

If Trading and options are not your thing and you’d like to be an investor, It’s VERY IMPORTANT you read the following:

• How To Compare The Performance of Funds - Part I

• How To Compare The Performance of Funds - Part II

After that reading, it’s time to get educated about options. The following with time should become second hand to you:

• Black and Scholes For Dummies - How To Do It Manually and With Excel

• Black and Scholes Calculator and Visualization

Now that you are up on the basics. The most common terms used in option trading are the greeks:

• The Delta

• The Gamma

• The Theta

The last greek is what is known as Vega - Volatility. You should know by now that the Vega is not directly observed from the market. Here are IMPORTANT articles about volatility and how it can help you:

• What is Implied Volatility Anyway

• Trading Volatility

• How To Estimate Future Volatility Like The Pros

• Estimating Volatility - Second Method

Now it’s time to get introduced to some popular option trading strategies:

• How To Make Money Trading Options With Synthetic Positions - Part I

• How To Make Money Trading Options With Synthetic Positions - Part II

• How To Make Money Trading Options With Synthetic Positions - Part II

• The Box Technique - Part I

• The Box Technique - Part II

• The The Most Bang For The Buck Technique

In using strategies, it’s also good to have Trend Indicators:

• The Variance Ratio Method - Trend Indicator

• A Powerful Trend Indicator Method

Before I let you go, please read the following about the Right Mindset:

• The Right Mindset For The Option Trader

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