Search results
Results from the WOW.Com Content Network
A call option gives you the right, but not the requirement, to purchase a stock at a specific price (known as the strike price) by a specific date, at the option’s expiration. For this right ...
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]
A naked option involving a "call" is called a "naked call" or "uncovered call", while one involving a "put" is a "naked put" or "uncovered put". [1] The naked option is one of riskiest options strategies, and therefore most brokers restrict them to only those traders that have the highest options level approval and have a margin account. Naked ...
You can buy a call on the stock with a $20 strike price for $2, and the option expires in six months. One long call contract costs $200, or $2 * 1 contract * 100 shares. ... A short call is the ...
In finance, an option is a contract which conveys to its owner, the holder, the right, but not the obligation, to buy or sell a specific quantity of an underlying asset or instrument at a specified strike price on or before a specified date, depending on the style of the option.
When you buy a call or put option, you pay a premium, which is the price of the option contract. If you buy an option and it expires worthless, you lose the premium you paid. Buying call and put ...
short put (with a strike price lower than the bought put - e.g. 80% of the current spot price) short call (with a strike price higher than the current spot price). The expiration dates of all the options are usually the same. The call strike is normally chosen in such a way that the sum total of the three option premiums is equal to zero.
Strangle - where you buy a put below the stock and a call above the stock, with profit if the stock moves outside of either strike price (long strangle). [4] Strangle can be either long or short. In short strangle, you profit if the stock or index remains within the two short strikes. [citation needed]