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Put option: A put option gives its buyer the right, but not the obligation, to sell a stock at the strike price prior to the expiration date. When you buy a call or put option, you pay a premium ...
The terms for exercising the option's right to sell it differ depending on option style. A European put option allows the holder to exercise the put option for a short period of time right before expiration, while an American put option allows exercise at any time before expiration.
Selling puts. Selling put options can be an attractive strategy to generate a nice premium, ... but the extra premium also helps offset any loss if the stock makes a big move before expiration. If ...
When to use it: A married put can be a good choice when you expect a stock’s price to rise significantly before the option’s expiration, but you think it may have a chance to fall ...
A Canary option is an option whose exercise style lies somewhere between European options and Bermudian options. (The name refers to the relative geography of the Canary Islands .) Typically, the holder can exercise the option at quarterly dates, but not before a set time period (typically one year) has elapsed.
In general, equity call options should only be exercised early on the day before an ex-dividend date, and then only for deep in-the-money options. For an American-style put option, early exercise is a possibility for deep in-the-money options. In this case, it may make sense to exercise the option early in order to obtain the intrinsic value (K ...
And only one option will help get you there, as measured at expiration, because if the stock rises, the put expires worthless, while if the stock falls, the call expires worthless.
In finance, the expiration date of an option contract (represented by Greek letter tau, τ) is the last date on which the holder of the option may exercise it according to its terms. [1] In the case of options with "automatic exercise", the net value of the option is credited to the long and debited to the short position holders.
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