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At the short strike of $24, the bull call spread is worth $4, a gain of eight times. In contrast, a long call would be worth $4 if the stock closed expiration at $24, good for only a gain of four ...
A short put ladder is also called a bull put ladder. [9] A ladder can be seen as a modification of a bull spread or a bear spread with an additional option: for instance, a bear call ladder is equivalent to a bear call spread with an additional long call. A bull put ladder is equivalent to a bull put spread with an additional long put.
Payoffs from a short put position Payoffs from a short call position. A naked option or uncovered option is an options strategy where the options contract writer (i.e., the seller) does not hold the underlying asset to cover the contract in case of assignment (like in a covered option).
A box spread consists of a bull call spread and a bear put spread. The calls and puts have the same expiration date. The resulting portfolio is delta neutral. For example, a 40-50 January 2010 box consists of: Long a January 2010 40-strike call; Short a January 2010 50-strike call; Long a January 2010 50-strike put; Short a January 2010 40 ...
A short call is the reverse strategy to the long call. Every long call that’s purchased is also sold or “written” by another trader who thinks the option looks attractively priced. A short ...
A short butterfly position will make profit if the future volatility is higher than the implied volatility. A short butterfly options strategy consists of the same options as a long butterfly. However now the middle strike option position is a long position and the upper and lower strike option positions are short.
The short straddle can also be classified as a credit spread because the sale of the short straddle results in a credit of the premiums of the put and call. The risk to a holder of a short straddle position is unlimited due to the sale of the call and the put options which expose the investor to unlimited losses (on the call) or losses limited ...
The iron condor is an options trading strategy utilizing two vertical spreads – a put spread and a call spread with the same expiration and four different strikes. A long iron condor is essentially selling both sides of the underlying instrument by simultaneously shorting the same number of calls and puts, then covering each position with the purchase of further out of the money call(s) and ...