such as $31, $32, $33, $100, or $105. They may also have $2.50 intervals, such as $12.50, $15.00, and $17.50. The distance between strikes is known as thestrike width. Strike prices and widths are set by the options exchanges. ...
A strike price is a set price at which the owner of an options contract can buy or sell the underlying asset in that contract. This price is a key feature of the contract and is also known as the exercise price. Options contracts come with different strike prices above and below the ass...
Understand how option prices are determined. The simplest situation is a call option issued with the strike price set at the current market price. When the seller of an option (called a writer) issues the contract, she charges a premium to cover expenses. For stock options, this is usually...
Understand how option prices are determined. The simplest situation is a call option issued with the strike price set at the current market price. When the seller of an option (called a writer) issues the contract, she charges a premium to cover expenses. For stock options, this is usually...
Once your account has been funded, head over to the trading area and choose the asset class that you wish to trade options on. In our example, we are looking to trade oil CFD options. You will then see a list of various call and put options, each with different strike prices. The bu...
Put sellers (writers) have an obligation to buy the underlying stock at the strike price. This is different from reselling a put you bought. What is a put option? A put option ("put") is a contract that gives the owner the right to sell an underlying security at a set price (“stri...
Equity option contracts usually represent 100 shares of the underlying stock. Strike prices (or exercise prices) are the stated price per share for which the underlying security may be purchased (in the case of a call) or sold (in the case of a put) by the option holder upon exercise of...
Traders buy a put option to magnify the profit from a stock’s decline. For a small upfront cost, a trader can profit from stock prices below the strike price until the option expires. When buying a put, you usually expect the stock price to fall before the option expires. It can be...
On the other hand, there is no benefit to exercising an option early if market prices decline. For example, if you own a call option with a strike price of $30 and market prices drop to $25 then it may be better to wait until expiration as your maximum loss is still limited to what...
This involves buying call and put options with the same expiry date but different strike prices. It is handy when predicting a large price move, but you want to pay a lower premium compared to a straddle. Strong Greek characteristics for a strangle are: ...