Protective Call is a simple options trading strategy where you simply buy to open 1 contract of at the money call options for every 100 shares that you shorted. Protective Call Example : To seal in that $10 appreciate in value, you would buy to open 1 contract (equivalent to 100 shares...
In this example, imagine you bought (long) 1 $40 July call option and also bought 1 $40 July put option. With the underlying trading at $40, the call costs you $1.14 and the put costs $1.14 also. Now, when you're the option buyer (or going long) you can't lose more than your...
Option spread trading has many advantages and add flexibility - from the simple debit or credit spread to more advanced strategies such as calendar spreads, butterflies, iron condors and ratios. 9.Option Trading Systems Some experienced traders have developed option trading systems, some of which are...
Put Options Expiration Example: Assuming you bought 1 contract of AAPL's January $200 put option for $15.00 (total price of $1500) when AAPL was trading at $200. You also have $20,000 cash in your trading account. On options expiration on the third Friday of January, AAPL was ...
To some extent, you can control just how wide you want the range to be and this is another example of just how flexible options trading can be.一些策略需要基础证券的价格保持在非常窄的范围内才能获得利润,而其他策略则可以从更广泛的范围中获利。 在某种程度上,交易者可以控制希望范围的宽度,这是另...
The maximum loss possible when selling or writing a put is equal to the strike price less the premium received. Here’s a simple example: Assume Company XYZ’s stock is trading at a price of $50, and you sell three-month puts with astrike priceof $40 for a premium of $5. Let’s...
Unlock the secrets of options trading with our in-depth guide to Option Pricing Models. Explore the history, different models, and practical examples.
your trading ideas already formed in your mind. They do not help you become a better trader or see the reality of the market. There are only 3 technical indicators you need to run this business: support, resistance and trend lines. That's' it. We keep it simple.Simple makes me money....
How Debit Spread Work Example 1 Assuming QQQ is trading at $61, its Mar $61 call options are trading at $0.60 and its Mar $62 Calls are trading at $0.20. You buy one contract of the Mar $61 Call options for $0.60 and offset that price by writing the Mar $62 Calls at $0.20. ...
Risk Reversal Hedging Example 2: Assuming XYZ trading at $44. Its Jun45Call is quoted at $0.75, its Jun43Put is quoted at $0.75. You shorted 100 shares of XYZ stocks and wish to hedge it without paying any extra money (apart from commissions of course). Buy To Open QQQQ Jun45Call...