investment-education

A calendar spread buys a longer-dated option and sells a shorter-dated option at the same strike price, profiting from the faster time decay of the near-term option when the stock stays range-bound.

The wheel strategy is a systematic options income strategy that cycles between selling cash-secured puts and covered calls, generating premium income at every phase of the cycle.

Open interest measures the total number of outstanding option contracts at a given strike and expiration. Learn what open interest means, how it differs from volume, and how to use it for strike selection, liquidity filtering, and trade confirmation.

The iron condor is a defined-risk options strategy that profits when the underlying stays within a price range.

Learn how strangle options work including long and short strangle payoff diagrams breakeven calculations and strangle vs straddle comparison.

The Black-Scholes model is the most famous options pricing formula in finance. Learn the BSM formula for European calls and puts, understand its assumptions, work through a step-by-step example, and explore the Greeks it derives.

A long short portfolio simultaneously holds long and short positions to generate alpha from stock selection on both sides of the market. Learn about dollar-neutral, beta-neutral, 130/30, and market-neutral strategies with real-world examples.

Learn what up and down capture ratios measure, how to calculate them using compounded returns, and how to use them to evaluate fund manager performance with real ETF examples.

Basis risk is the uncertainty that the difference between spot and futures prices will change over a hedge horizon, creating residual risk even in well-designed hedges.

Cross hedging uses a futures contract on a related asset to hedge an exposure when no direct contract exists. Learn the minimum variance hedge ratio formula, how to calculate the optimal number of contracts, and what drives hedge effectiveness.