Caveat Emptor : Let the Option Trader Beware Last Minute Option trading gives tremendous opportunities but be extremely cautious when you are dealing with such contracts. Especially if the contract has a high probability of ending In The Money. The options that expiry In The Money usually attracts a very high Securities Transaction Tax.
One of the most confused concepts and misrepresented concept in Stock Trading. Failing to understand and implement Statistical Volatility and Implied Volatility before placing any trade is a very gross mistake which can result in huge losses that cannot be easily repaired.
“Read 500 pages like this every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.” -Warren Buffett
The process of selecting the Options Trading Strategies begin with implied volatility. Key Component in determining an option price is Implied Volatility. Option Price premium is determined with Implied Volatility. Easy way to understand Volatility is that option price and volatility will move in the same direction, keeping all the other things same.
PAPER TRADING IS VERY IMPORTANT UNDERSTANDING ITS DISADVANTAGES IS EVEN MORE IMPORTANT Kindly find the SLIDES BELOW
OUR FAVORITE IS THE LAST POINT WHICH IS ALSO THE BONUS POINT UNDERSTANDING OVERTRADING