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What position in call options is equivalent to a protective put?
Wiki User
∙ 14y ago
An investor who purchases a put option while holding shares of the underlying stock from a previous purchase is employing a "protective put."
In other words, you buy a put option on stock you already own.
Wiki User
∙ 14y ago
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Relationship between a regular call option and a binary call option?
While the CALL options remain the same for both regular and binary options, the difference being that with binary options you don't actually own the asset you are trading on. It is based on mere speculation of the market movements.
What happens when you Short a call option?
"Shorting a call" is better known as writing a naked call. Basically, a naked call is a call on a position you don't hold, and it has unlimited risk--if you get exercised and the strike price plus the premium is lower than the stock price, you must make up the difference out of your margin account--or you'll receive a margin call from your brokerage. Many brokerages won't allow you to write a naked call, and the ones that will demand a very large margin account and a lot of experience in trading options.
What is the proper way to sell call options to protect a long stock position?
A call option is the right to buy a specific stock at a set price (known as the strike price). for this "Right" to lock in a price, the option buyer pays the seller (also known as the grantor) money which is known as the Option Premium. Now here's where most folks get tripped up . . . You can enter the market by Buying the call (go long) or selling the call (grant, go short, or sell). If you buy the call, your risk is limited to the money that you paid the seller, i.e. the Option Premium. Your potential profit is unlimited, in the sense that if you hold the right to buy Apple at $500, you would continue to make money provided Apple continues to rise. However, if you are the seller or grantor - you sell a call - your profit is now limited to the Option Premium that you received, and your risk is unlimited. By selling the option you have essentially made a price guarantee on a stock in exchange for a lump sum payment - the option premium. So some investors utilize what is called "Covered Calls." They buy the underlying stock, say 1000 shares of apple. They are now "long" apple. Next they "Grant" (sell) call options against their long apple position. They receive the "option Premium" on the calls from the buyer, which is credited in their account. They are now long the stock, and short the call options. If apple stays the same or goes down, they owe the option purchaser nothing, and get to keep his money (option premium) once the options expire. If the price rises, the grantor is a loser on the option, but is covered by his long apple stock position, example - if he bought Apple at 400 and then granted Call options against it at a strike price of 400, if apple goes to 500 he essentially takes his winnings on his Apple Stock, and passes them (covers) his call option losses. So to clarify, your answer by selling calls against a long stock position, you lock in the option premium, which could essentially act as a limited cushion in the amount of that premium, should the stock price remain unchanged or fall in an amount of less than the option premium received.
Explain the difference between a call option and a long position in a futures contract?
The only difference between a long call option and a long futures position is the derivative itself--one of them is an option, the other is a futures contract.
What is the minimum value of a call option?
The minimum value of a call option is zero. Why is that? Because options lose value with time until they expire on their pre-determined expiration date. Upon expiration, if the price of the underlying stock is less than the strike price of the call option, then the call seller gets to keep the premium received, whereas the call buyer has lost all the money paid for the option. For additional education there are many good websites to consult. One site of interest ishttp:/www.safe-options-trading-income.com.
What do you call a fractions are located at exactly the same position on a number line?
Equivalent fractions.
What do you call the protective outfit of a knight?
Armour
What do you call a skunks protective divice?
'Musk spray'
Let's call the position physically where your TV is as "position A". Let's call the position where you want to have your first component feeding the TV as "position B".?
Let's call the position physically where your TV is as "position A". Let's call the position where you want to have your first component feeding the TV as "position B".
What do you call a protective covering that encloses the cell?
the cell membrane
What do you call the protective cavity in the skull that protects the eyehalls?
orbit
What do you call when the chemical protective coat and trousers are worn together?
CPO
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.
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.
If you are waiting for the answer from a job you have interviewed but another job you have applied call you what should you do?
If the second job offers you a position, and that is your second choice, ask what the time frame is for accepting or declining the position. Most companies and businesses will give you at least a few days to consider all options.
How do you play options?
Playing options is as simple as opening an options trading account and then buying call options for stocks you think will go up and buying put options for stocks you think will go down.However, that is only the mere basics. There are almost endless ways to play options through combining options of different strike prices and expirations; what we call Options Strategies.
How do you make conference call in e71?
Make a conference callTo make a conference call, enter a participant's phone number and press the call key.When the participant answers, select Options > New call .When you have made a phone call to all the participants, select Options > Conference to merge the calls into a conference call.To mute the microphone of your device during the call, select Options > Mute .To drop a participant from the conference call, scroll to the participant and select Options > Conference > Drop participant .To discuss privately with a conference call participant, scroll to the participant and select Options > Conference >Private .
