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Author: Orren

What Happens When Your Options Expire In The Money?

“Oh no! It’s 4:01 pm, Friday afternoon… My Options expired in the money, and I don’t have enough money to take hold of the Stock!!” This is actually not that big of a deal, believe it or not. In most cases, your Options (whether you bought them or sold them) will be exercised. However, what exactly is the process of exercise and assignment if you don’t have enough money to cover the cost of actual stock? It’s simple. In The Event You’re Assigned On Your Options Your broker will mostly likely take hold of the stock on your behalf....

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How Much Money Can You Make With Options Spreads?

This is a common question, with a simple answer. Trading Options Spreads are great, because the return on risk is much higher than selling naked Options. The Formula Let’s say you’re trading XYZ (Everyone’s favorite Stock, right?) You want to trade a simple Vertical Spread. Let’s say you’re bullish in both of the next two examples. Here’s what happens if you sell a Vertical, or if you buy a Vertical: Selling a Vertical If you’re selling a $50 Strike, and buying the $48 Strike for a total Credit of $0.50: Your maximum risk is the width of the Strikes, minus the...

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The 4 Reasons Day Trading Can Become Gambling

Is Day Trading gambling? That’s an interesting question, and one that many finance professors would answer with a resound “Yes”. But it’s not that simple. Day Trading can be gambling, IF you don’t know what you’re doing… and the reality is that most people don’t know what they are doing. 1 – If You’re in it To Get Rich Quick The line between Day Trading and gambling gets really thin, really quickly when your expectation is to double your money every day. The reality is that trading (whether it be Day Trading, Swing Trading, or Position Trading) is a business. A...

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