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A jelly roll consists of a long call and a short put with one expiry date, and a long put and a short call with a different expiry date, all at the same strike price. [3] [4] In other words, a trader combines a synthetic long position at one expiry date with a synthetic short position at another expiry date.
Straddle - an options strategy in which the investor holds a position in both a call and put with the same strike price and expiration date, paying both premiums (long straddle). [3] ATM straddle can be used for earnings when you are anticipating that the underlying stock will move in a direction by an extent that exceeds the total to purchase ...
The synthetic long put position consists of three elements: shorting one stock, holding one European call option and holding dollars in a bank account. (Here is the strike price of the option, and is the continuously compounded interest rate, is the time to expiration and is the spot price of the stock at option expiration.)
A long call is the purchase of a call option. A long call offers the right, but not the obligation, to purchase a stock (or other asset) at a specific price by a specific date, at which point the ...
A long box-spread can be viewed as a long synthetic stock at a price plus a short synthetic stock at a higher price . A long box-spread can be viewed as a long bull call spread at one pair of strike prices, K 1 {\displaystyle K_{1}} and K 2 {\displaystyle K_{2}} , plus a long bear put spread at the same pair of strike prices.
The options trader makes a profit of $200, or the $400 option value (100 shares * 1 contract * $4 value at expiration) minus the $200 premium paid for the call.
A long call ladder consists of buying a call at one strike price and selling a call at each of two higher strike prices, while a long put ladder consists of buying a put at one strike price and selling a put at each of two lower strike prices. [1] A short ladder is the opposite position, in which one option is sold and the other two are bought. [1]
An option payoff diagram for a long straddle position. A long straddle involves "going long volatility", in other words purchasing both a call option and a put option on some stock, interest rate, index or other underlying. The two options are bought at the same strike price and expire at the same time. The owner of a long straddle makes a ...