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You’ll have both calls and puts, and many trading strategies and tactics to use them, such as covered calls, married puts and bear put spreads. So you can match the options strategy with a ...
A covered call is an options trading strategy that offers limited return for limited risk. A covered call involves selling a call option on a stock that you already own. By owning the stock, you ...
The best brokers for options trading can help you identify attractive options trades. 2. Bear put spread. What the bull call spread does for rising stocks, the bear put spread does for falling stocks.
A covered option is a financial transaction in which the holder of securities sells (or "writes") a type of financial options contract known as a "call" or a "put" against stock that they own or are shorting. The seller of a covered option receives compensation, or "premium", for this transaction, which can limit losses; however, the act of ...
Opposite to that are Put options, simply known as Puts, which give the buyer the right to sell a particular stock at the option's strike price. This is often done to gain exposure to a specific type of opportunity or risk while eliminating other risks as part of a trading strategy. A very straightforward strategy might simply be the buying or ...
The married put (also known as a protective put) is a bullish strategy and consists of the purchase of a long stock and a long put option. The married put has limited downside risk provided by the purchased put option and a potential return which is infinite. Calculations for the Married Put Strategy are: Net Debit = Stock Price + Put Ask Price
Short put. 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 ...
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.