Option trading remains a mystery to many new traders. There are elements to option trading that traders should know about to make trading easier. In this article, I give an example of how an options trader might use implied volatility in his trading. Then, I discuss implied volatility charts and how they are created.
There is [...]

It is very common that stock is transacted in blocks divisible by 100, which is called a round lot. A round lot has become a standard trading unit on the public exchanges for quite sometime ago. In stock market, we have the right to buy and sell an unlimited number of shares as long [...]

I've been watching put and call options on GOOG, and last Friday was expirations day for JULY options, and on that day, the prices of all the AUGUST options dropped a lot, much more than was justified by the stock price change. Both puts and calls dropped, and I can't figure out why. [...]

A share has entered a period of infinite volatility. You want to buy a European call option on this share with a strike price of 100, which you delta hedge at the current share price, 90. The call expires in one year. What is the fair price of this call option and what is the [...]

I think i have to do redo this part. I wrote a covered option call which was exercised for a modest profit. Now do i make them as two separate transactions or just adjust the cost basis to reflect the gain from the option?
If they were reported separately on your 1099 then list them separately. [...]

Here is my question: let's say I buy $1,000 worth of call options. Before expiration, the stock price raises well above the strike price. I now want to take advantage of the gain and exercize the option. I want to buy at the strike and immediately sell it. The problem is, I don't exactly have [...]