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Put options vs. call options. The other major kind of option is called a call option, and its value increases as the stock price rises. So traders can wager on a stock’s rise by buying call options.
Some stockholders sell call options against their stock positions or write put options as a way to create income. Such strategies can be attractive and relatively low-risk ways to use options.
Investors who buy call options usually expect the price of the stock to increase so that they can buy it below market value. Many online brokers offer commission-free options trading, but you’ll ...
Put option. In finance, a put or put option is a derivative instrument in financial markets that gives the holder (i.e. the purchaser of the put option) the right to sell an asset (the underlying), at a specified price (the strike), by (or on) a specified date (the expiry or maturity) to the writer (i.e. seller) of the put.
Options: contracts that give the owner the right, but not the obligation, to buy (in the case of a call option) or sell (in the case of a put option) an asset. The price at which the sale takes place is known as the strike price, and is specified at the time the parties enter into the option. The option contract also specifies a maturity date.
Option strategies are the simultaneous, and often mixed, buying or selling of one or more options that differ in one or more of the options' variables. Call options, simply known as Calls, give the buyer a right to buy a particular stock at that option's strike price. Opposite to that are Put options, simply known as Puts, which give the buyer ...
2. Bear put spread. Like the bull call spread, the bear put spread is a hedged trade — a short option and a long option — but it’s set up to profit when the underlying stock falls. In the ...
1. Long call. In this option trading strategy, the trader buys a call — referred to as “going long” a call — and expects the stock price to exceed the strike price by expiration. The ...