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It depends on the investor.
An example: You buy a call on 100 shares of Acme at a $20 strike price, and you pay a $1 per share premium for it. Your intent is to make $100 profit, and to do so you'll have to sell the stock for at least $22 per share plus whatever your broker's commission is--if you have a broker that charges $10 for stock sales and $20 for exercising calls, you'll have to sell the stock for $22.30 per share to make your $100 profit.
If you are selling call options on stock you own (covered call) then there are two returns to think about: return-if-flat (meaning stock doesn't change between today and the option's expiration), and return-if-called (the return if the stock is called away from you). There are tools available to calculate both of these (see www.borntosell.com).
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∙ 13y ago
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The market allocates capital to companies based on?
Risk, efficiency and expected returns.
Which factor sets an upper limit on how much can be paid for savings?
Producers' expected returns on their business investments
If CAPM is valid then a stock having more volatile returns must have larger expected return than a stock with less volatile returns to compensate for higher risk borne?
no
What do you call one who is expected to lose?
the underdog
Which one has great potential-call option or put option?
Call options allow you to always buy the underlying stock at its strike price before expiration no matter what price the stock is in future and is therefore bought when the underlying stock is expected to go UP. Put options allow you to always sell the underlying stock at its strike price before expiration no matter what price the stock is in future and is therefore bought when the underlying stock is expected to go DOWN. As such, which one has greater potential depends on the prevailing market condition and your general outlook on the trend of the underlying stock. Generally, call options would have more appreciation potential in a bull market and put options would have more appreciation potential in a bear market.
What do you call radar reflections off a solid object?
Returns.
What do you call a question asked that no answer is expected?
A rhetorical question
How do you enter Superman returns game cheats?
You simply press start, select options, then you enter the code.
Why is the call option trading higher than previous months?
Call options are heavily traded when market sentiment is generally bullish. The higher call options trading at least tells you that options traders are bullish on the overall market.
What is meant by a tax system based on voluntary compliance?
All citizens are expected to prepare and file income tax returns.
What do you call the house in Tracy beaker returns?
Elm Tree House
How do they determine trading calls?
Call options allow you profit when the price of the underlying stock goes up. So you would buy call options when you wish to profit upwards and sell call options when you wish to profit sideways or downwards.
