Search results
Results from the WOW.Com Content Network
Put option: A put option gives its buyer the right, but not the obligation, to sell a stock at the strike price prior to the expiration date. When you buy a call or put option, you pay a premium ...
Call options vs. put options. The other major kind of option is called a put option, and its value increases as the stock price goes down. So traders can wager on a stock’s decline by buying put ...
A call option is a contract giving you the right to... The basic way that calls and puts function is actually fairly simple. Call vs Put Options: Understand the Difference
Often the call with the lower exercise price will be at-the-money while the call with the higher exercise price is out-of-the-money. Both calls must have the same underlying security and expiration month. If the bull call spread is done so that both the sold and bought calls expire on the same day, it is a vertical debit call spread.
For a spread put it is = (, +). When K equals zero a spread option is the same as an option to exchange one asset for another. An explicit solution, Margrabe's formula , is available in this case, and this type of option is also known as a Margrabe option or an outperformance option.
Nor does the seller hold any option of the same class on the same underlying asset that could protect against potential losses (like in an options spread). 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]
Investors can use options to hedge their portfolio against loss. Also, they can help buy a stock for less than its current market value and increase gains. Call vs put options are the two sides of ...
The iron butterfly is a special case of an iron condor (see above) where the strike price for the bull put credit spread and the bear call credit spread are the same. Ideally, the margin for the iron butterfly is the maximum of the bull put and bear call spreads, but some brokers require a cumulative margin for the bull put and the bear call.