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Today's Question & Answer

Do you have questions about options trading? 

We've got answers. Our team of experts stand ready to answer any questions you have regarding options trading. Each trading day we will select one question to answer from all those submitted. These questions have been archived below for your ongoing perusal. Hopefully, this will quickly become an extensive library of educational material.

In order for this to be such a resource, we ask but one thing — we need your questions. They can be as simple or as complex as you like, and we will try to answer a fair sampling on both ends of that spectrum.

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Daily Options Question & Answer Archive
October, 2008

DateQuestion
10/6/2008

Should I use a stop-loss order when I purchase an option? If I do, should I use the option price or the stock price as the "trigger" to establish the stop-loss order?

10/3/2008

What is modern portfolio theory?

10/2/2008

What are the pros and cons of rolling out naked puts that unexpectedly go in the money further out of the money?

10/1/2008

How do option prices get affected by weekends? Do they lose value the equivalent of two or three trading days worth or is there some kind of adjustment?

9/30/2008

I am interested in trading in-the-money options to get a high delta in the belief that my prediction as to the direction of the underlying stock will be correct. In doing so, how important is open interest in determining which month and strike to choose?

9/29/2008

I don't want to commit more than $5000 to options trading. Is it possible to begin with this amount?

9/26/2008

Can you discuss a few options strategies and how they relate to levels of risk?

9/25/2008

I was looking at call options available on Microsoft (MSFT), and I noticed an option symbol, VMFAE with the letter "V" at the beginning of it. I assume this option is a LEAPS position, but I am not certain what the "V" represents. Can you please explain this new symbol to me and provide me with more information about LEAPS?

9/19/2008

Why do people write or sell in-the-money options? If I write an in-the-money option will it be exercised right away?



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