I took a look around the broker's site that dojibear had listed for quotes (http://www.optionsxpress.com). In the Educate section, you can find a good run-down of spread trading methods et. al. under the "Strategies" link. The "Advanced Concepts" will give you a decent overview of how options are priced and what the Greeks mean. Could be worth a look.
This site : http://www.hoadley.net/options/calculators.htm has a great educational tools to price the option contracts if you are interested in all the mathematical side of it, VERY academic. You could calculate the price online, or d/l the excel spreadsheet and calculate off-line. I like the excel spreadsheet, it gives me the profile of different spreads. KB96, having a headache with all those Greeks yet? Cheers !!
I'm learning a ton. Exactly the kind of info I was looking for. The greeks all make since to me. I am really interested in the bull / bear spreads now. Thank you all very much. I would still like to hear from more of you on strategies that you use and on plays that have worked for you also.
KB96, When you play bull/bear spread, be careful, one leg covers the other. When you go in/out, you buy/sell both legs together, or cover the short before selling the long, otherwise you'll have a naked leg... and may forget... and surprise! nasty phone calls! Cheers!!
There has always been a fascination with trading spreads...There are some aspects of spreads that vary dramatically depending upon which markets you are actually trading...For instance, in the OEX where the indicies have a very large skew to the put side, many novices will trade into a bear spread and see the actual underlying trade thru their spread without seeing a maximum profit potential until the final days of expiration... Also, there are many who will watch a very profitable position deteriorate to nothing in the final days of the expiration cycle...Or worse yet, the premium sellers will try and squeeze a few more pennies out of what appear to be very probable price containment only to get run over by the gamma train in the final days of the expiration cycle... There are no easy answers to the options equation...Like every other security, they require constant adjustment, constant profit taking or spreading, etc...I have seen alot of people get involved with options, put the trade on and turn off their brain...Many options trades show nice profits for many traders, yet many will watch them evaporate in the final days of an expiration cycle... I know, I speak from experience...