Tag: strike price psychology

Introduction:Strike price selection is a critical aspect of options trading, impacting potential profits and risk management. It is interesting to note that strike prices often follow specific increments, such as $5 or $10 increments, even though the underlying asset's price may not align perfectly. In this article, we will explore the psychology behind popular strike price increments and how they influence options trading decisions. Standardized Strike Price Increments:Options exchanges typically offer standardized strike prices in predetermined increments. Common increments include $2.50, $5, and $10. These increments allow for ease of...