Ads
related to: shorting a call option
Search results
Results from the WOW.Com Content Network
A short call is the sale of a call option. With a short call, the trader promises to sell the stock at a specific price by a specific date to the buyer of that call.
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]
The synthetic long put position consists of three elements: shorting one stock, holding one European call option and holding dollars in a bank account. (Here is the strike price of the option, and is the continuously compounded interest rate, is the time to expiration and is the spot price of the stock at option expiration.)
Here are five option strategies for advanced investors and how they work. ... The long call costs $100 ($1 per contract * 100 shares per contract * 1) offset by $50 from the short call ($0.50 per ...
The options trader makes a profit of $200, or the $400 option value (100 shares * 1 contract * $4 value at expiration) minus the $200 premium paid for the call.
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 .
Payoffs from a short put position, equivalent to that of a covered call Payoffs from a short call position, equivalent to that of a covered put. 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.
Call option: A call option gives its buyer the right, but not the obligation, to buy a stock at the strike price prior to the expiration date.
Ads
related to: shorting a call option