Chapter 7. General Characteristics of Optioned Companies and Options Behavior Around Earnings Announcements

Before we begin our discussion of specific types of option trades, we should discuss the proverbial forest versus the trees. We’ll concentrate on describing some of the general phenomena around options trading, as well as some of the general characteristics of companies that have options listed on the Chicago Board Options Exchange (CBOE) (versus those that don’t). This discussion provides a strong economic and intuitive background for and understanding of the environment within which you’re trading but are taking for granted.

The Nature of Companies That Have Listed Options (Versus Those That Don’t)

Not all publicly traded companies have ...

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