I made my first options trade – exactly 67 days after publishing my first post on options, I made a trade. I sold four covered calls for $2577.67 net premium received.
Delta and gamma are two important “greeks” to understand when learning about options. Delta is an estimate of how a change in price in the underlying security will impact an option’s premium.
Time Decay is theta. It is a theoretical value of the amount by which an options contract could decrease per day if all other variables remained constant.
If you buy to open a position by buying a call or put – you are long an options contract. If you’re long a call or put, you hope to sell the options contract at a higher price – i.e. you’d sell the call or put to close the transaction. If you sell to open a position by selling a call or put – you are short an options contract. If you’re shot a call or put, you hope to buy the options contract at a lower price – i.e. you’d buy the call or put to close the transaction.