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This options trading strategy is the flipside of the long put, but here the trader sells a put — referred to as “going short” a put — and expects the stock price to be above the strike ...
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.
Here’s what you need to know about options trading for beginners. Options Trading Explained. Options are tradeable contracts that let investors bet on the future performance of individual ...
An option holder may on-sell the option to a third party in a secondary market, in either an over-the-counter transaction or on an options exchange, depending on the option. The market price of an American-style option normally closely follows that of the underlying stock being the difference between the market price of the stock and the strike ...
The trader may also forecast how high the stock price may go and the time frame in which the rally may occur in order to select the optimum trading strategy for buying a bullish option. The most bullish of options trading strategies, used by most options traders, is simply buying a call option. The market is always moving.
The options trader employing this strategy hopes that the price of the underlying security goes up far enough that the written put options expire worthless. If the bull put spread is done so that both the sold and bought put expire on the same day, it is a vertical credit put spread. Break even point = upper strike price - net premium received
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