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The calendar call spread (see calendar spread) is a bullish strategy and consists of selling a call option with a shorter expiration against a purchased call option with an expiration further out in time. The calendar call spread is basically a leveraged version of the covered call (see above), but purchasing long call options instead of ...
A covered call is a kind of hedged strategy, in which the trader sells some of the stock’s upside for a period of time in exchange for the option premium. Normally, selling a call option is a ...
Unlike selling a call option, selling a put option exposes you to capped losses (since a stock cannot fall below $0). Still, you could lose many times more money than the premium received.
Risks of call and put options. Buying and selling call and put options does come with risk. Here are a few to be aware of: Have to be right about the stock’s direction: You have to correctly ...
Payoffs from a bull call spread A bull spread can be constructed using two call options. Often the call with the lower exercise price will be at-the-money while the call with the higher exercise price is out-of-the-money. Both calls must have the same underlying security and expiration month. If the bull call spread is done so that both the ...
Option strategies are the simultaneous, and often mixed, buying or selling of one or more options that differ in one or more of the options' variables. Call options , simply known as Calls, give the buyer a right to buy a particular stock at that option's strike price .
In an uncovered call, the trader sells a call option on a stock, promising to sell the stock at the strike price for the life of the contract. If the stock doesn’t close above the strike price ...
It involves simultaneously buying and selling (writing) options on the same security/index in the same month, but at different strike prices. (This is also a vertical spread) If the trader is bearish (expects prices to fall), you use a bearish call spread. It's named this way because you're buying and selling a call and taking a bearish position.
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