New to option trading?

Not sure what the difference is between a butterfly, a condor, or a mouse?

(Hint: there is no strategy called “mouse”)

In this video I open up one of my personal trading accounts to show you 4 trades that are all of a different strategy. We have a naked put in oil futures options, a butterfly in Berkshire Hathaway, an iron condor in LVS, and a straddle in LVS. All four trades are doing well.

Watch the video to see how they look on the risk graphs as well as how they are made up and work.

In the optiongenius portfolio we do not do naked puts or straddles, but we do a lot of iron condors and some butterflies. In times of low volatility with the VIX below 30 these non directional strategies work wonderfully. In high volatility markets, they can work as well but with adjustments and a [...]

Q:  Dear Allen,

I am pretty new to the option trading and that’s why have to ask this very basic question.
You are sometimes coming with a recommendation  “Will have to hold to expiration”. I would like to get better understanding of the processes that happen at the expiration day.  Could you please explain it briefly or refer me to the right place where I could find this information ?

Thank you

A: On expiration we look for the closing price. This is normally the close of the day for most options, or it can be close to the opening price for index options (the final settlement price for index options is complicated). If you sold an option you know if you want the price to be above or below the closing price.
 
So if you sold a 50 strike naked put, you want the price to close above 50. If it does, the option expires [...]

This article is from cnbc.com.  http://www.cnbc.com/id/39418129

Not only does the article tell the story of how the trader did it, but also gives you the trade he is in right NOW.

One thing I want to point out is that this trade had very little risk for this trader. Why? Because it seems that the trader was bullish on the stock and thus would have bought the shares had they gone down. So basically he would have gotten a discount on them as well as have the ability to buy them below what their “value” was.

Fun With Options: Trader Pockets $455K on Walgreen

Published: Wednesday, 29 Sep 2010 | 9:53 AM ET by Jeff Cox

Some (options) guys (or girls) have all the luck.

Nick Ut / AP

Well, at least one of them has had a tremendous amount of good fortune lately by playing long and short positions against each other on drug store chain [...]