Understanding Strike Price in Options Trading

Conceptual illustration of strike price in options trading

Intro

Understanding strike price is crucial for anyone venturing into the world of options trading. As we explore this concept, we’ll delve into its significance, how it impacts profitability, and the strategies that can be formulated around it. Knowing the strike price isn't just about numbers; it’s about grasping the underlying market conditions that affect those numbers.

What hit you most when you started learning about options? Many might agree that the sheer array of terms and definitions can feel like learning a new language. The strike price is a key player in this lexicon, serving as a pivotal point in determining the value of an option.

Investment Terminology

Getting familiar with some terminology can go a long way in enhancing your understanding of options trading, so let’s look at a few key definitions related to strike price.

Key Definitions

Strike Price: The set price at which an option can be bought or sold, depending on whether it's a call or put option.
Intrinsic Value: The difference between the current market price of the underlying asset and the strike price of the option. If this yields a negative number, intrinsic value is considered zero.
Extrinsic Value: Also known as time value, this is the portion of an option's price that exceeds its intrinsic value, often linked to the time left until expiration.

Commonly Used Terms

In-the-Money (ITM): This is when a call option’s strike price is lower than the current market price of the asset, or a put option’s strike price is higher. These options have intrinsic value.
Out-of-the-Money (OTM): A call option is OTM if its strike price is above the market price, while a put option is OTM if its strike price is below.
At-the-Money (ATM): This term refers to an option whose strike price is nearly identical to the current market price of the underlying asset.

Understanding these terms lays a solid groundwork. When these terms come into play, they give depth to your trading decisions, especially as market conditions shift.

Expert Advice

Understanding the strike price is one thing—navigating it actively through solid strategies is another. Here’s where expert advice comes into the picture.

Investment Strategies

Selecting the Right Strike Price: For long-term trading, consider choosing out-of-the-money strike prices. If your predictions about market movements are strong, this is an affordable way to leverage potential upsides.
Consider Market Trends: Look at past performance and current trends. In volatile markets, a more conservative approach might mean choosing in-the-money options, which provide some level of intrinsic value.

Risk Management Tips

Diversification: Don’t put all your eggs in one basket. Spread your investments across options with varying strike prices to minimize risk.
Set Stop-Loss Levels: Determine a point at which you'll sell to avoid significant losses. This decision should reflect your risk tolerance and market volatility.

"Understanding the strike price is like decoding the rules of a game; it’s essential to play successfully in the market."

Modern-day trading is fueled by information and the dynamics of prices often follow complex paths influenced by the broader economy. Familiarizing yourself with the nuances of strike prices empowers you not only to recognize opportunities but also to mitigate risks. Keep educating yourself and stay alert—the world of options trading is as thrilling as it is intricate.

Understanding the Concept of Strike Price

When talking about options trading, the strike price serves as a cornerstone of the discussion. It is crucial for both novice and seasoned traders to understand not only what a strike price is but why it holds such significance in the realm of financial markets. The strike price, essentially, is the set price at which an options contract can be exercised, meaning it is the price at which the holder can buy or sell the underlying asset. This fundamental concept provides a framework for evaluating potential trades and assessing their profitability.

Definition of Strike Price

The strike price is where it all begins in options trading. It represents the price agreed upon in the options contract, allowing the buyer of a call option the right to purchase the underlying stock at this price before the expiration date. Conversely, for put options, the holder has the right to sell at the strike price. In simpler terms, if you think of options as bets on the future price of an underlying asset, the strike price is the number you stake your claim on. This definition anchors all other considerations that traders must evaluate when selecting options.

Importance in Options Trading

Understanding the strike price is not just about knowing the mechanics. It has profound implications for trading strategies. The relationship between the strike price and the underlying asset's price can dictate whether a trade is successful or not.

Profitability Assessment: A well-chosen strike price can significantly enhance an option's profitability. If the market price of the asset surpasses the strike price in the case of call options, or if it falls below the strike price for put options, traders can enjoy lucrative returns. The distance to the underlying asset's market price plays a crucial role.
Market Sentiment and Strategy: The assignment of the strike price often reflects the trader's perspective on market movements, risk tolerance, and investment outlook. For instance, aggressive traders may choose out-of-the-money options that come with higher risk and reward potential, while conservative investors may favor in-the-money options that offer lower risk but steadier returns.
Impact on Liquidity and Cost: The choice of strike price can also influence the option's premium. Options with strike prices closer to the current market price typically command higher premiums due to higher intrinsic value. In contrast, far-off strike prices often come cheaper, but with higher risk of not being in the money by expiration.

In short, the strike price is not merely a number; it defines an options trader's landscape, playing a critical role in determining potential risks, rewards, and overall trading strategy.

Understanding how to navigate the landscape of strike prices empowers investors to make informed decisions, potentially turning a risky venture into a strategic triumph.

Types of Options and Their Strike Prices

Understanding the various types of options and their respective strike prices is essential for anyone interested in options trading. Strike price is the price at which the underlying asset can be bought or sold when exercising the option. Each type of option—calls and puts—carries unique characteristics and considerations tied to its strike price.

When navigating the world of options trading, grasping these types is paramount because they inform investors not just of potential profits but also of the inherent risks. Different strategies arise depending on whether an investor chooses call options or put options, and the strike price chosen can significantly affect the outcome.

Let’s delve deeper into these specific types and how their strike prices play out in practical scenarios.

Call Options

Call options permit the holder to purchase an underlying asset at a predefined strike price. Investors opt for call options primarily when they anticipate that the price of the underlying asset will experience an upward movement. A lower strike price is attractive as it increases the chance of profitability due to the potential for greater intrinsic value if the market price climbs past the strike price.

Graph showing relationship between strike price and market value

For instance, suppose an investor buys a call option with a strike price of $50 on a stock that is currently valued at $45. If that stock soars to $60, the option becomes quite valuable. The intrinsic value in this case would be $10, which could translate to significant profits for the holder.

However, there are factors to consider when evaluating call options:

Time until expiration: The option must be exercised before expiration. If the price of the underlying asset doesn’t rise sufficiently before that time, it can lead to a loss.
Market conditions: Bullish momentum in the market can bolster the probability of a substantial price increase.

The intriguing aspect of call options is that they allow for leveraging smaller amounts of capital to achieve larger exposures to market movements, making them appealing for strategic investors.

Put Options

Conversely, put options give the holder the right to sell an underlying asset at a predetermined strike price. Investors typically purchase put options if they predict that an asset's price will decline. A higher strike price can provide a better likelihood of capturing profit if the underlying asset depreciates significantly.

Take, for example, a put option with a strike price of $70 on a stock currently priced at $75. If that stock tumbles to $60, exercising the put option yields a gain since the holder can sell the asset at $70, thus enjoying a $10 intrinsic value.

Key considerations for investors interested in put options include:

Market sentiment: A bearish or pessimistic outlook in the market often amplifies the appeal of put options since they rely on a decrease in the underlying asset’s price.
Correlation with the underlying asset: Understanding how closely the stock’s movements align with market trends is crucial.

In essence, the choice between call and put options hinges upon market forecasts and risk appetite. Investors may mix both types to create a balanced portfolio, managing potential profits against anticipated losses.

These nuances encapsulate why knowing about the types of options, along with their corresponding strike prices, is pivotal in the options trading landscape. Being able to discern when to utilize calls or puts, based on market conditions and individual strategy, can be the difference between a winning trade and a costly mistake.

The Role of Intrinsic and Extrinsic Value

Understanding intrinsic and extrinsic value is pivotal in options trading as it shapes the perception of an options contract's worth. These two types of value are essential for investors looking to make sound decisions based on the contract's potential profitability. Each type affects pricing, decisions on purchasing options, and strategies to maximize gains.

Intrinsic Value Explained

Intrinsic value serves as a quantitative measure of the immediate value of an options contract. For call options, it is the amount by which the stock price exceeds the strike price. Conversely, for put options, it reflects how much the strike price surpasses the stock price. Simply put, if a call option's strike price is lower than the current market price of the asset, it carries intrinsic value.

For example, imagine Company A's stock is trading at $150, and you hold a call option with a strike price of $120. The intrinsic value of that option would be $30 because you could theoretically exercise it and buy shares at a lower price. This intrinsic value represents real, tangible profit potential.

On the flip side, if the stock were to decline to $100, that same call option would have no intrinsic value, as exercising it would mean overpaying for shares. This idea of intrinsic value is crucial because it forms the basis for the investor's expectation when entering a trade, reflecting potential profitability.

Extrinsic Value and Time Decay

Extrinsic value represents the additional premium that an options trader pays on top of the intrinsic value. It comprises a multitude of factors, including time until expiration and the volatility of the underlying asset. It answers the question of how much one is willing to pay for potential future profit.

One unique aspect of extrinsic value is its relationship with time decay. As the expiration date approaches, the extrinsic value diminishes. This phenomenon is known as time decay, which is like a ticking clock for options buyers. For example, an option with three months until expiration will typically possess more extrinsic value compared to one that expires in just a few days, even if both options have the same intrinsic value.

To illustrate, consider a trader who buys a call option for Company B with a strike price of $200, two months before expiration. If Company B's stock is currently at $210, the trader pays a premium of $15, where $10 accounts for intrinsic value, and $5 is the extrinsic value. However, as expiration nears, if the stock price remains the same, the extrinsic value will reduce, affecting the overall premium of the option.

In summary, understanding intrinsic and extrinsic value goes beyond mere concepts; it's about grasping how these elements interplay to inform better trading strategies. Recognizing these values helps investors navigate complex market terrains and make choices that align with their financial goals.

Understanding these fundamental concepts lays the groundwork for strategic options trading, enabling investors to assess risks and rewards effectively.

Factors Influencing Strike Price

Stakeholders in options trading must grasp the nuances of strike price — think of it as the battleground on which traders make their fortunes or losses. Understanding the factors that play into setting this pivotal figure is essential for executing savvy options strategies. The strike price dictates not just the eligibility for profit from an option, but it also serves as a significant point of analysis when sketching out investment plans. Recognizing these factors helps traders make educated choices, avoiding hasty decisions.

Market Conditions

Market conditions are often the bread and butter of trading decisions. In a bullish market, where stocks are generally rising, traders might be more inclined to select higher strike prices for call options, banking on continued appreciation in stock value. For instance, consider a scenario where a stock is currently trading at $50; a trader might choose a strike price of $55, suspecting that the price will exceed this threshold soon. Conversely, in bearish markets, traders may gravitate towards lower strike prices for put options. Here, the aim is to capitalize on declines in stock value.

Supply and Demand Dynamics: The interaction between buyers and sellers in the market can lead to fluctuations in strike prices. When many traders are clamoring for a particular option, its strike price can become inflated.
Economic Indicators: Metrics like unemployment rates, inflation data, and consumer confidence index can greatly affect market sentiment and, as a result, strike price selection. If economic indicators suggest upcoming volatility, traders may adjust strike prices accordingly.

Understanding current market conditions not only guides strike price selection but can also provide a broader view of potential investment outcomes.

Underlying Asset Volatility

Volatility is a two-headed coin; while it can spell uncertainty, it also opens gateways to opportunities. The price swings of an underlying asset directly impact the choice of strike price. High volatility means larger fluctuations in the stock price, which can prompt traders to select more aggressive strike prices, aiming to capture those rapid changes in value.

For example, consider a tech stock known for its erratic movements. A trader might select a strike price that is significantly away from where the stock is currently trading, expecting wide price swings. However, the opposite can be true as well; in a low-volatility environment, traders usually prefer tighter strike selections, keeping their strike prices closer to the underlying asset’s current price as they anticipate smaller price fluctuations.

Historical Volatility: Understanding how an asset has performed over time can provide clues as to what to expect in the future. For options traders, historical volatility might inform their decisions on whether to chase or evade risky strike prices.
Implied Volatility: This is based on the market's expectations for future volatility derived from asset options prices. High implied volatility can make even slightly out-of-the-money strike prices appealing.

Infographic depicting intrinsic and extrinsic value of options

Time Until Expiration

Time is an invaluable commodity in options trading. The closer the expiration date, the more relevant the strike price becomes. A strike price that seems attractive today might not be as appealing tomorrow if it does not correspond with favorable movements in the underlying asset’s price.

Time Decay: As options approach expiration, their extrinsic value diminishes. This decay, known in the trading community as "theta decay," can lead traders to adjust their strike price choices. For example, if a trader has options expiring in a week, they may choose a strike price that isn’t too far from current levels to ensure they capture profit potential before time runs out.
Long vs. Short Term Options: Depending on their strategy, traders might choose different strike prices for long-term versus short-term options. Short-term options often require strike prices that align closely with the current price of the underlying asset, whereas those investing in long-term options can be more aggressive with their strike prices as they can afford to wait for market movements.

In summary, navigating the factors influencing strike price is akin to charting a course through rough seas. Grasping the interplay of market conditions, underlying asset volatility, and time until expiration enables traders to make informed decisions that align with their investing strategies. This knowledge not only enhances their potential profitability but also mitigates unnecessary risks associated with options trading.

Setting the Optimal Strike Price

Determining the optimal strike price is one of the pivotal elements in options trading. It can significantly influence the outcome of a trade, affecting both the potential for profit and the level of risk involved. When setting the strike price, traders need to consider various factors, including market conditions, underlying asset volatility, and their own investment strategies. Getting this right is not just a matter of luck; it requires a strategic approach.

Strategies for Selecting Strike Prices

When it comes to selecting strike prices, there are several strategies that one might employ. Each method comes with its own set of advantages and potential pitfalls. Here are some key strategies that traders often use:

At-the-Money (ATM) Options: Choosing a strike price that is close to the current market price of the underlying asset can be a common strategy for many traders. ATM options typically have higher premiums and can be more sensitive to price movements. This strategy is great for those who expect significant volatility in the market.
In-the-Money (ITM) and Out-of-the-Money (OTM) Options: ITM options come with intrinsic value, while OTM options do not. ITM options typically require paying a higher premium but they often offer greater potential for profit, especially if the market price moves favorably. On the other hand, OTM options can be cheaper and offer a larger upside potential, making them attractive for traders with a bullish outlook.
Adjusting for Time Decay: The time left until expiration can dramatically impact the pricing of options. As expiration approaches, the extrinsic value diminishes and traders need to be conscious of how this decay affects different strike prices.

In practice, many traders find combining multiple strategies to be most effective. Evaluating the market landscapes and adapting their strike price selections accordingly can lead to a more tailored trading approach.

Risk Management Considerations

Setting an optimal strike price goes hand in hand with effective risk management. A strategy that doesn’t account for risk can lead to financial losses, regardless of how well one might predict price movements. Here are some considerations:

Define Acceptable Risk Levels: Understanding how much risk you are willing to take with a particular trade is crucial. This often involves setting strict parameters around potential losses and adhering to them. One might consider their overall portfolio allocation when deciding.
Avoid Overleverage: Using high leverage can amplify potential gains, but it also increases the risk of considerable losses. It’s wise to ensure that any selected strike price aligns with a conservative approach toward leverage.
Diversifying Strike Prices: Traders may spread their investments across various strike prices and expirations to diversify and manage risk effectively. This can help cushion against adverse movements in market prices across their entire portfolio.
Regular Review and Adjustment: Options trading often demands active management of positions. A good strategy is to regularly review and adjust strike prices based on changes in market conditions and the performance of the underlying asset.

The selection of strike prices is not merely a technical decision; it's intertwined with the trader’s risk capacity and overall market knowledge. Neglecting these factors can jeopardize everything.

The Impact of Strike Price on Profitability

When navigating the complex waters of options trading, understanding the impact of strike price on profitability is crucial. The strike price acts as a pivot point that differentiates a profitable option from a losing one. It sets the stage for potential gains and losses, serving as a benchmark against which market performance is measured. The decisions surrounding strike price can make or break a trading strategy, impacting how an investor capitalizes on market fluctuations.

Scenarios of Profit and Loss

Let's delve into how varying strike prices can yield different outcomes. Consider an investor who buys a call option with a strike price of $50 for a premium of $5. For this option to be profitable, the underlying asset's price must exceed the total cost of $55 (strike price plus premium) upon expiration. If the stock closes at $60, the investor realizes a profit of $5 per share, post deducting the premium.

On the flip side, if the stock only reaches $52, the option expires worthless, resulting in a loss of the $5 premium paid. Hence, the chosen strike price not only shapes scenarios of profit but also dictates loss limits.

"Set your strike price wisely; it’s the anchor to your profitability in options trading."

There are multiple scenarios to consider:

Deep in-the-money options tend to have higher intrinsic values, leading to lower risks but also lower percentage returns.
At-the-money options often provide a balanced risk-reward dynamic, increasing volatility while remaining sensitive to price changes.
Out-of-the-money options are riskier, high-reward trades but depend heavily on price movements to realize any profit.

In these scenarios, the net result hinges entirely on the original strike price. The decision-making process during these trades can benefit from a clear understanding of these possible outcomes, balancing risk with potential rewards.

Breakeven Analysis

Breakeven analysis in options trading is essential for gauging how close a trader is to a profitable position. The breakeven point helps investors quantify how much movement in the underlying asset is required to cover the cost of the option. For example, continuing with the previous scenario where the call option's strike price is $50 and the premium is $5, the breakeven price becomes $55.

To visualize this:

Strike Price: $50
Premium: $5
Breakeven Price: $50 + $5 = $55

Thus, for the call option to become a value-generating asset, the underlying asset needs to trade above $55 at expiration.

Unlike call options, the breakeven calculation for put options operates oppositely. If an investor buys a put option with a strike price of $40 and pays a premium of $4, the breakeven point would be at $36. Therefore, if the underlying asset drops below $36, the trader stands to profit, but trades above it reflect a loss.

In summary, breakeven points vary significantly with strike prices and premiums, providing crucial insights for profit planning and risk management. Understanding where these points lie can empower traders to make well-informed choices, positioning them to navigate market uncertainties carefully.

In essence, the interplay between strike price, profit scenarios, and breakeven analysis deeply influences potential outcomes in options trading. Investors must approach each new trading opportunity with a keen awareness of how their strike price decisions can shift the balance of risk and reward.

Case Studies on Strike Price Decisions

Analyzing case studies related to strike price decisions is crucial in options trading. It offers real-world insights into the decision-making processes traders employ when confronted with various market conditions. Each case can illuminate unique strategies and outcomes that serve as valuable lessons for both novice and experienced traders.

Illustrative chart of investment strategies and strike price

By examining these examples, investors can grasp how different strike prices affect overall profitability. Furthermore, these case studies highlight the variability in outcomes based on market behavior, the timing of trades, and the strategies adopted.

Examples from Historical Data

Historical data provides a treasure trove of insights into how past market behaviors influence strike price choices. For instance, consider the case during the 2008 financial crisis, where volatility was at its peak. Traders who selected a strike price far from the underlying asset's market price often found themselves in precarious positions. Conversely, those who opted for nearer strike prices could often turn a profit despite the chaotic backdrop.

A Cow's Tale

Taking an example from the agricultural sector, let’s look at a trader who invested in options for corn futures just as prices were expected to soar due to an anticipated drought. The trader set the strike price right at the current price of $5 per bushel. When reports confirmed the drought, prices jumped to $7. This decision to keep the strike price close helped mitigate risks and allowed locking in profits as the price rose sharply. When analyzing such historical data, whether for corn, oil, or tech stocks, it becomes clear how the historical context frames strike price decisions.

Lessons Learned from Practical Applications

Diving into practical applications reveals the strategies underpinning effective strike price decision-making. These lessons are often derived from traders' experiences in real markets, where theory meets practice.

Risk Management is Key

One of the most significant lessons revolves around effective risk management. For example, a trader who had adopted a conservative approach by selecting higher strike prices for call options during bullish trends might shield themselves from drastic losses. This means that when volatility strikes, the risk of losing the entire premium is minimized. This conservative tactic requires monitoring market conditions closely and adjusting strike prices accordingly, enhancing a trader's ability to adapt in fluid environments.

Flexibility Matters

Another essential insight describes the importance of flexibility in strategy. A case study might involve a trader who initially set a strike price for a put option but adjusted it as new market data became available. This adaptability led to greater profitability as it transformed a potentially losing position into a break-even scenario or even a profit. It showcases how making informed adjustments can impact overall success.

In summary, examining case studies concerning strike price decisions enriches the strategic framework for options trading. By reflecting on outcomes and adjusting strategies accordingly, traders can cultivate a resilient approach, navigating the often turbulent market waters with greater confidence.

"Learning from historical case studies is not just about numbers; it’s about grasping the narratives that shape market behavior and strategic decisions."

For further insights, consider visiting resources like Investopedia or Cboe, where trading strategies, including strike price considerations, are discussed in more detail.

Future Trends Affecting Strike Price

As the world of options trading evolves, understanding what influences strike prices allows traders to adapt their strategies accordingly. The dynamics of strike prices are about to hit new peaks and troughs thanks to emerging trends. In this discussion, we focus on two major factors: technological advancements and regulatory changes. Recognizing these trends isn't just academic; it's crucial for developing successful trading approaches.

Technological Advancements

The digital age has revolutionized many industries; options trading is not an exception. The rise of artificial intelligence and algorithmic trading has made it essential to keep pace with the rapid changes in the marketplace. Tools powered by AI analyze countless data points faster than any human can. Thus, traders need to consider how the development of smart trading systems affects strike prices.

Some key aspects include:

Data Analytics: Today, traders have access to advanced analytical tools that predict market movements based on historical data. This allows for more precise determination of optimal strike prices.
Automated Trading Systems: With algorithms making trades on behalf of investors, the concept of human intuition in selecting strike prices might fade out. Instead, you’ll witness machines determining prices based on set parameters.
Blockchain Technology: The introduction of decentralized finance (DeFi) is set to disrupt traditional finance, making information less siloed. With transparency and speed, you can quickly identify accurate strike price predictions based on real-time data.

In essence, technological advancements provide traders the ability to navigate turbulence in the market, allowing for informed and agile responses in determining strike prices.

Regulatory Changes

The landscape of options trading is intricately linked to regulatory frameworks that can shift at a moment's notice. Governments and financial authorities worldwide are continuously refining the rules that govern markets. These regulatory changes often have a direct or indirect impact on strike prices, forcing traders to stay sharp and informed.

Important considerations include:

Compliance Costs: New regulations may require additional reporting or compliance efforts, which can influence the overall trading strategy, including the selection of strike prices.
Market Accessibility: Regulations can either open up new avenues for trading or shut them down. Increased access to options trading for the average investor can lead to elevated trading volumes, influencing market dynamics and potentially affecting strike prices.
Global Harmonization of Regulations: As digital currencies and options trading penetrate international waters, understanding a unified regulatory structure becomes critical. The shift towards aligned regulations internationally could redefine how brokers approach strike pricing.

"Understanding regulatory trends is as essential as grasping market conditions. Both elements play a role in comprehensive strategy formulation."

Epilogue

The discussion surrounding strike price in options trading is not merely academic; it serves as a cornerstone for savvy trading strategies. To recap, the strike price holds significant weight in determining both risk and reward in options trading. By comprehending the nuances of the strike price, investors can engage more thoughtfully in financial markets.

Recap of Key Insights

Basis of Options Valuation: The strike price is crucial for evaluating the potential of options contracts. It is the predetermined price at which an underlying asset can be bought or sold, shaping the outcome of trades.
Influencer of Profitability: The selected strike price plays a key role in profit or loss scenarios. For instance, setting a strike price too far from the current market value may diminish potential profits, while choosing a more favorable strike increases the odds for positive outcomes.
Market Reactions: Market conditions continually shift, and these changes influence the decision-making process regarding strike prices. Investors must be vigilant and adapt their strategies correspondingly, ensuring they are not left in the lurch.
Strategic Implications: Understanding the interplay between strike price, market volatility, and expiration timelines allows for better-informed choices in investment strategies. For example, while a conservative investor might favor in-the-money options, a more aggressive trader may pursue out-of-the-money contracts for a higher risk-reward ratio.

Final Thoughts on Strike Price in Strategy Development

The fundamental role of strike price in options trading cannot be overstated. It is an essential variable that affects everything from risk exposure to potential returns. As traders develop strategies, they should deeply consider their own risk tolerance and investment goals.

Aligning with Investment Goals: Investors need to mesh their strike price strategy with their overall portfolio. A long-term investor might favor different strike prices compared to a day trader.
Adaptiveness is Key: As trends and market environments evolve, a rigid approach could prove detrimental. Flexibility in selecting strike prices and adjusting tactics based on new data or economic indicators can set apart the successful investors from the rest.
Holistic Viewpoint: Ultimately, the strike price isn’t an isolated decision. It intertwines with psychological factors, market behavior, and broader economic conditions influencing overall trading success.

As one trades in options, recognizing the importance of the strike price allows for a more strategic and thoughtful investment approach.

For additional information on options trading, interested readers can explore resources from reputable financial sites such as Investopedia, or academic insights found at CFA Institute.

Keeping abreast of ongoing market trends and adjusting one's strategy in light of new information ensures a disciplined and educated approach to options trading.

Have More Awesome Stuff: