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If the stock finishes above the strike price, the owner must sell the stock to the call buyer at the strike price. ... you could buy a low-cost option and make many times your money. However, it ...
The call owner can exercise the option, putting up cash to buy the stock at the strike price. Or the owner can simply sell the option at its fair market value to another buyer before it expires.
When you sell a put, you’re agreeing to purchase the stock at the strike price until expiration in exchange for a premium. If the stock doesn’t finish expiration below the stock price, the ...
If you're trying to simply buy and sell options as a trader, hoping to make money on price movements, you're destined to fail. The costs of trading are high, prices move rapidly, and options are ...
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]
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