Options

Options are contracts between two parties that give the holder the right, but not the obligation, to buy or sell an underlying asset at a set price within a set amount of time. The Royal Bank of Canada has a good plain-language explainer, what are options, and I have listed other places to start at the bottom of this page. There’s quite a bit to learn about options. I’ve been trading options for nearly 5 years and I can tell you I’ve only scratched the surface. Here, I am doing three things to help you: explain the pieces in plain language, show you a real example of how an options trade can multiply money (and why that is only half the story), and list the things to look out for before you buy your first contract. ...

Options Volume vs Open Interest: A Beginner’s Guide Volume and open interest are two of the most commonly quoted numbers on an options chain, and they are also two of the most commonly confused. Both describe activity in a contract, but they measure different things and answer different questions. Understanding the distinction helps you read liquidity, positioning, and conviction before you place a trade. What Is Volume? Volume is the number of contracts traded during a single session. It resets to zero at the start of every trading day and counts every buy and every sell that crosses in that contract, regardless of whether the trade opened a new position or closed an existing one. ...

SPY 2022 $500.