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The holder/purchaser/owner of a call option contract has the right to buy an asset (or call the asset away) from a writer/seller of a call option contract at the pre-determined contract or strike price. The holder/purchaser/owner of a call option contract expects the price of the underlying asset to rise during the term or duration of the call contract, for as the value of the underlying asset increases so does the value of the call option contract. Conversely, the write/seller of a call option contract expects the price of the underlying asset to remain stable or to decline. The holder/purchaser/owner of a put option contract has the right to sell an asset (or put the asset) to a writer/seller of a put option contract at the pre-determined contract or strike price. The holder/purchaser/owner of a put option contract expects the price of the underlying asset to decline during the term or duration of the put contract, for as the value of the underlying asset declines the contract value increases. Conversely, the writer/seller of a put option contract expects the price of the underlying asset to remain stable or to rise.
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Call option and put option?
A call option allows its purchaser to buy ("call in") stocks at a certain price on a certain date--say, 100 shares of Walmart for $50 on November 1. A put option allows its purchaser to sell ("put") stocks on a certain price for a certain date. The seller of the option has to buy them (in a put) or sell them (in a call) if the option is exercised.
Explain carefully the difference between writing a put option and buying a call option?
When you write a put option, you are player banker to someone betting that the price of a stock is going up. You receive the "bet" in the form of the options premium earned form the person buying the put options from you. If the stock fails to exceed the strike price of the put options by expiration, the buyer has lost the bet and you keep the "bet" money as profit. In this case, your profit is limited to the "bet" money or options premium you received for selling the put options. When you buy a call option, you are buying the right to buy a stock at a fixed price until expiration. If you buy a call option with strike price of $10 and the stock subsequently went up to $50, you can still buy the stock at $10 and then sell it for $50, making the $40 difference as profit. In this case, your profit is only limited to how high the stock rises.
How do you change the price call option and put option?
Once you enter into the contract, you can't change the price.
How do you hedge a call option?
You hedge a call you sold by purchasing a put in usually the same security.
Explain the difference between a put option and a short position in a futures contract?
Well, the first difference is the root difference between a futures contract and an option contract: in a futures contract you MUST complete the sale at the end of the contract (if you didn't buy it back before the settlement date) but in an option you CAN.Once we're past that, the short position in a futures contract--the person who has the item the contract is derived from, such as a thousand bushels of wheat--is the same as the buyer of a put. Both of them have the thing now, and will transfer title to it after settlement or exercise.
What is the difference between an option call and an option put?
An option call gives the holder the right to buy an asset at a specified price, while an option put gives the holder the right to sell an asset at a specified price.
What is the difference between buying a call option and selling a put option?
Buying a call option gives you the right to buy a stock at a certain price, while selling a put option obligates you to buy a stock at a certain price.
What is the difference between selling a call option and selling a put option?
Selling a call option gives someone the right to buy a stock at a certain price, while selling a put option gives someone the right to sell a stock at a certain price.
What is the concept of put call parity about?
'Put-call parity' is a popular term used among investments. The 'put-call parity' concept is used to describe a relationship between the price of a call and put option.
What is the difference between writing a call option and buying a put option?
In both cases, you will have to provide the stocks to the counterparty if the option is exercised. There are two differences. First is the nature of the option. Calls are exercised when the stock spot price exceeds the call's strike price. Puts are exercised when the stock spot price is below the put's strike price. The other is, if you write a call you don't get to decide whether it gets exercised--the buyer does. If you buy a put, the choice to exercise it is yours.
Call option and put option?
A call option allows its purchaser to buy ("call in") stocks at a certain price on a certain date--say, 100 shares of Walmart for $50 on November 1. A put option allows its purchaser to sell ("put") stocks on a certain price for a certain date. The seller of the option has to buy them (in a put) or sell them (in a call) if the option is exercised.
What is the difference between a call option and a put option?
A call option gives the option buyer the right, but not the obligation, to buy a certain amount of stock on or before a certain date for a certain price. A put option gives its buyer the right, but not the obligation, to sell stock on or before a certain date for a certain price. How the options are exercised is another difference. If you bought a put, you're hoping the stock price falls below the strike price--the certain price in the contract. It would make no sense to sell stock for $10 a share if it's $15 now, right? Calls exercise when their stock price goes above the strike price.
What is an option buy?
An option buy is when you buy an option, whether call option or put option, using the Buy To Open order.
Explain carefully the difference between writing a put option and buying a call option?
When you write a put option, you are player banker to someone betting that the price of a stock is going up. You receive the "bet" in the form of the options premium earned form the person buying the put options from you. If the stock fails to exceed the strike price of the put options by expiration, the buyer has lost the bet and you keep the "bet" money as profit. In this case, your profit is limited to the "bet" money or options premium you received for selling the put options. When you buy a call option, you are buying the right to buy a stock at a fixed price until expiration. If you buy a call option with strike price of $10 and the stock subsequently went up to $50, you can still buy the stock at $10 and then sell it for $50, making the $40 difference as profit. In this case, your profit is only limited to how high the stock rises.
What are the differences between options trading call and put?
Options trading involves two types of contracts: call options and put options. A call option gives the holder the right to buy an asset at a specified price within a certain time frame. This is used when the investor believes the asset's price will rise. A put option, on the other hand, gives the holder the right to sell an asset at a specified price within a certain time frame. This is used when the investor believes the asset's price will fall. In summary, the main difference between call and put options lies in the investor's outlook on the asset's price movement - call options are used for bullish expectations, while put options are used for bearish expectations.
What are the factors that affect currency put option and currency call option premiums?
go to yahoo stocks
How do you change the price call option and put option?
Once you enter into the contract, you can't change the price.
