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These include covered calls and cash-secured puts involve selling options to collect premiums upfront. This generates income, but also caps upside potential. Hedging strategies.
With puts, on the other hand, you write and sell a contract in which the buyer has the right to sell you the underlying asset. You can make a steady stream of income off the premiums that these ...
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 involves selling a call option (“going short”) but with a twist. Here the trader sells a call but also buys the stock underlying the option, 100 shares for each call sold.
Guts - buy (long gut) or sell (short gut) a pair of ITM (in the money) put and call (compared to a strangle where OTM puts and calls are traded). Butterfly - a neutral option strategy combining bull and bear spreads. Long butterfly spreads use four option contracts with the same expiration but three different strike prices to create a range of ...
If the stock price stays the same or rises sharply, both puts expire worthless and you keep your $350, minus commissions of about $20 or so. If the stock price instead, falls to below 18 say, to $15, you must unwind the position by buying back the $19 puts at $4 and selling back the 18 puts at $3 for a $1 difference, costing you $1000.
A long call ladder consists of buying a call at one strike price and selling a call at each of two higher strike prices, while a long put ladder consists of buying a put at one strike price and selling a put at each of two lower strike prices. [1] A short ladder is the opposite position, in which one option is sold and the other two are bought. [1]
Buying and selling options is not the same as day trading, since options are for the right to buy or sell at a future date. But puts and calls can be bought and sold by day traders.
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related to: selling puts and calls for income calculator canada revenue company