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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.
Options trading can be complex, and the trading jargon may confuse even experienced investors and traders. Two of the most common options contracts to understand are call and put options.
Call or Put (C/P) Strike Price (#####.###) listed with five digits before the decimal and three digits following the decimal; For Example, an April 16, 2015 $30.00 Call Option on Yahoo would be listed as "YHOO150416C00030000". [3] All options that settle into the same underlier (e.g. 100 shares of the underlier) share the same symbol field. [2]
In the financial world, options come in one of two flavors: calls and puts. The basic way that calls and puts function is actually fairly simple. A call option is a contract giving you the right to...
Option values vary with the value of the underlying instrument over time. The price of the call contract must act as a proxy response for the valuation of: the expected intrinsic value of the option, defined as the expected value of the difference between the strike price and the market value, i.e., max[S−X, 0]. [3]
If the price of the underlying stock is above a call option strike price, the option has a positive intrinsic value, and is referred to as being in-the-money. If the underlying stock is priced cheaper than the call option's strike price, its intrinsic value is zero and the call option is referred to as being out-of-the-money. An out-of-the ...
These include call options or more advanced option strategies such as a bull call spread, ... Yahoo Sports. Rockets blow 4-point lead in 5 seconds in meltdown loss to Nets. Sports.
The writing of the call option provides extra income for an investor who is willing to forego some upside potential. The BXM Index is designed to show the hypothetical performance of a strategy in which an investor buys a portfolio of the S&P 500 stocks, and also sells (or writes) covered call options on the S&P 500 Index.