Understanding the Options Chain with Allison Simpler Trading

Learn how to read charts for options trading with the course Understanding the Options Chain

When you first open the Option Chain, the sheer volume of numbers, columns, and conceivable movement might be intimidating. Allison will explore every aspect of the options chain in this Understanding the Options Chain course, ensuring that you have a firm grasp of the option chain and how to trade it.

On the Options Chain, the first item that a trader often notices are the two most frequently used Option trading terms: Call and Put. A Call is the right to acquire a stock at a specified price and time period. A put option enables the holder of the stock to sell a defined amount of its underlying at a given price within a specified time period.

The increasing row of numbers in the Option Chain’s middle is the next aspect that attracts a trader’s attention. The term Option Strikes refers to them. Strikes are the fixed prices at which you are willing to buy (Call) or sell (Put) an underlying asset.

When a trader studies the Option Chain, the horizontal drop down boxes containing dates may catch their notice. These are called expirations. When the trader selects a date from the drop-down box, a list of prospective strikes is shown. As the expiration date approaches, the inherent value of the trader’s strike increases, while the extrinsic value of the strike decreases. Furthermore, this is not the whole of what you will study in the course Understanding the Options Chain.

And there are so many more things you will be learning from the course Understanding the Options Chain.

Why do we need to learn how to use option chain?

An options chain, also known as an option matrix, is a list of all conceivable option contracts on a certain security that is traded on a stock exchange. For a single underlying asset over a defined maturity period, it shows all put and call options, their expiration dates, strike prices, as well as volume and pricing statistics for all of the options. As a general rule, the chain will be separated into calls and puts based on the expiration date of the contracts.

Regular investors may get information via option chains, which are possibly the most natural method. The option quotations are arranged in a logical order throughout the document. By comparing the maturity dates and strike prices of the underlying options, traders can determine how much the option premium will cost. Depending on how the data is presented, bid-ask quotes, also known as mid-quotes, may also be shown inside an option chain.

Figure out who Allison Ostrander is

Allison Ostrander, who is currently working as Director of Risk Tolerance at Simpler Trading, graduated from Stephen F. Austin State University with a Bachelor of Fine Arts in Theater.

Allison grew as a trader via sharing her knowledge with our community over the course of a decade of options trading. Her trading experience and ability to teach others to trade are obvious in her videos and blog posts. She has seen and experienced the ups and downs of trading firsthand. Her mission is to help traders in reducing their losses in order for their profits to exceed their losses. Allison is an expert at deciphering complex trading strategies and chart patterns for both beginner and experienced traders. Her unique perspective on Capital Risk, the Chart, and the Option Chain may bring a new perspective on investing for any trader.