OPTION STRATEGIES
DATE: 05-12-2011 TIME: 11.29
Long Call
This strategy consists of buying a Call in the hope that the value of the underlying security will increase. Buying a Call allows to buy a determined number of shares (normally, but not always, 100) at a determined price (strike) before (in some cases only at) a set date (expiration day – normally on the Friday following the third Thursday of the month). http://www.goldennifty.com
This strategy consists of buying a Call in the hope that the value of the underlying security will increase. Buying a Call allows to buy a determined number of shares (normally, but not always, 100) at a determined price (strike) before (in some cases only at) a set date (expiration day – normally on the Friday following the third Thursday of the month). http://www.goldennifty.com
Long Put
This strategy consists of buying a Put in the hope that the value of the underlying security will decrease. Buying a Put allows to sell a determined number of shares (normally, but not always, 100) at a determined price (strike) before (in some cases only at) a set date (expiration day – normally on the Friday following the third Thursday of the month). http://www.goldennifty.com
This strategy consists of buying a Put in the hope that the value of the underlying security will decrease. Buying a Put allows to sell a determined number of shares (normally, but not always, 100) at a determined price (strike) before (in some cases only at) a set date (expiration day – normally on the Friday following the third Thursday of the month). http://www.goldennifty.com
Long Call Spread
This strategy consists of the purchase of a Call on a particular underlying stock, while simultaneously writing a Call on the same underlying stock with the same expiration month, at a higher strike price. Both the buy and the sell are opening transactions, and are always the same number of contracts. This is a moderately bullish strategy used to capitalize on a modest increase in price of the underlying stock. To make the maximum profit on the strategy, both of the options need to be in-the-money at expiration – have intrinsic value. http://www.goldennifty.com
This strategy consists of the purchase of a Call on a particular underlying stock, while simultaneously writing a Call on the same underlying stock with the same expiration month, at a higher strike price. Both the buy and the sell are opening transactions, and are always the same number of contracts. This is a moderately bullish strategy used to capitalize on a modest increase in price of the underlying stock. To make the maximum profit on the strategy, both of the options need to be in-the-money at expiration – have intrinsic value. http://www.goldennifty.com
Short Call Spread
This strategy consists of the purchase of a Call on a particular underlying stock, while simultaneously writing a Call on the same underlying stock with the same expiration month, at a lower strike price. Both the buy and the sell are opening transactions, and are always the same number of contracts. This is a moderately bearish to neutral strategy. To receive the maximum profit on a credit spread, both of the options have to be out-of-the money at expiration – expire worthless.
This strategy consists of the purchase of a Call on a particular underlying stock, while simultaneously writing a Call on the same underlying stock with the same expiration month, at a lower strike price. Both the buy and the sell are opening transactions, and are always the same number of contracts. This is a moderately bearish to neutral strategy. To receive the maximum profit on a credit spread, both of the options have to be out-of-the money at expiration – expire worthless.
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