Covered calls work because if the stock rises above the strike price, the option buyer will exercise their right to buy the stock at the lower strike price. This means the option writer doesn't profit on the stock's movement above the strike price. The options writer's maximum profit on ...
Covered calls work because if the stock rises above the strike price, the option buyer will exercise their right to buy the stock at the lower strike price. This means the option writer doesn't profit on the stock's movement above the strike price. The options writer's maximum profit on ...
A bull call spread is simply the combination of purchasing a call option with a "low" strike price and selling an additional call option with a strike price which is higher than that of the "low" strike price option. As an example, let's assume that your hedge committee has decided that...
Buying a call option with a lower strike price, which is in-the-money (ITM) or at-the-money (ATM). This is the long call leg of the spread. Selling a call option with a higher strike price, which is out-of-the-money (OTM). This is the short call leg of the spread. The goal...
Covered calls work because if the stock rises above the strike price, the option buyer will exercise their right to buy it at the lower strike price. This means the option writer doesn't profit from the stock's movement above the strike price. The options writer's maximum profit on the ...
Take a look at the chart below which shows AAPL options for January and you will see that the call options with the lower strike prices are more expensive than the higher strike prices. The second important factor that influences the price is the number of days left until the call or put...
Covered calls work because if the stock rises above the strike price, the option buyer will exercise their right to buy the stock at the lower strike price. This means the option writer doesn't profit on the stock's movement above the strike price. The options writer's maximum profit on ...
Purchasing a call with a lower strike price than the written call provides a bullish strategy Purchasing a call with a higher strike price than the written call provides a bearish strategy Short Call Buy or writeBuyWrite Option:Select option ...
stock rises above the strike price, the option buyer will exercise their right to buy the stock at the lower strike price. This means the option writer doesn't profit on the stock's movement above the strike price. The options writer's maximum profit on the option is the premium received...
option, and at expiration of the option the price of the underlying asset S is below the Strike Price K , the option is clearly worthless for you. It makes no sense to buy the asset for the higher strike price K, if you can turn around and buy it for the lower market price S....