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Options

Smart options trading starts with options training.
CONTENT WITH Options
Once a bullish stock candidate has been identified, option traders need to select an appropriate strategy that matches their price forecast. In this article, we’ll take a closer look at how an in-the-money (ITM) bull call spread stacks up against an out-of-the-money (OTM) bull call spread.
Stocks Mixed at Mid-Day Mark, off Early Morning Highs
Friday (10/19) was the 31st anniversary of “Black Monday”; so called because it was the largest single-day market drop in history. Just to put things into perspective; on that day (October 19, 1987) the SPX dropped 57.86 points, which was -20.47%. With the SPX at a significantly higher level now, the equivalent decline today would be a drop of more than 566 points!

If you're like most investors, you probably have positions in your account that you've held for a long time. But, that doesn't mean that if the price was right, you wouldn't consider selling a few shares and taking some profits.

The CSEP is an income-generating, discount-buying strategy that option traders have been utilizing for years. It is very similar to an options trading strategy that you may already be familiar with,
The purpose of this ongoing blog is to share my 34 years of trading experiences, with the majority of my trading career spent as a Market Maker on the Chicago Board Options Exchange. 
If a concentrated stock position represents a large share of an investor’s wealth, then that investor is susceptible to idiosyncratic, or stock specific risk. This is why many investors turn to equity collars as a way to protect their concentrated stock positions in an economically efficient manner.
There is a lot of information that you might be able to extract from an options trade. In this article we will show you what to look for and what it might suggest about the trade.

Many traders hold long or short positions in individual equities and simultaneously trade options ‘around’ those positions.

With so many bullish options strategies to choose from, how do you know which is right for your next trade? In this article, we’ll compare two bullish options strategies in order to assist you with the decision-making process.

Important Disclosures

Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the options disclosure document titled "Characteristics and Risks of Standardized Options." Supporting documentation for any claims or statistical information is available upon request.

Multiple-leg options strategies will involve multiple commissions. Covered calls provide downside protection only to the extent of the premium received and limit upside potential to the strike price plus premium received.

Futures trading offered and positions held through Charles Schwab Futures, Inc., a separate but affiliated company of Charles Schwab & Co., Inc. Both are subsidiaries of The Charles Schwab Corporation. Futures trading involves substantial risk and is not suitable for all investors. Please read Risk Disclosure Statement for Futures and Options.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. All expressions of opinion are subject to change without notice in reaction to shifting market conditions.

Schwab does not recommend the use of technical analysis as a sole means of investment research.

Investors in ETFs should consider carefully information concerned in the prospectus, including investment objectives, risks, charges and expenses.

You can request a prospectus by calling 800-435-4000. Please read the prospectus carefully before investing. Investors in Closed-End Funds please note that since these securities are not continuously offered, there may be no prospectus available.

Investment returns will fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed or sold, may be worth more or less than their original cost. Unlike mutual funds, shares of ETFs are not individually redeemable directly with the ETF. Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV).

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