0
Whenever you want. You collect the premium at the time you sell the call.
Wiki User
∙ 12y ago
Add your answer:
Earn +20 pts
If prices drop what happens to call option prices?
If the price of an underlying commodity or security drops, the value of call options will decline as well. If you are long the calls this would be bad. If you are short the calls this would be good. Long Call - Risk Limited to Option Premium Paid, Profit Unlimited. Hoping for Market Rise. Short Call - Risk Unlimited, Profit limited to the premium received for the option. Hoping for Market Decline, or stay the same. Long Put - Risk Limited to Option Premium Paid, Profit Unlimited. Hoping for Market Decline. Short Put - Risk Unlimited, Profit limited to the premium received for the option. Hoping for Market Rise, or stay the same.
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.
How do you make a collect call from Japan?
To make a collect call from Japan, you need the complete number you are calling, including the country code. Speak to the Japanese long distance operator and give him or her the number. They will place the call for you.
How can you get a telephone service that just allows collect calls?
if you mean that people may call you collect , but you cannnot make long distance - yes you can.
Can a collect call carrier send you to collections if you never signed a contract to receive calls?
Generally the liability for toll and collect calls in included in your phone companies very long and often small print. If this is a third-party collect call service, then you are considered to have accepted after pushing the button to accept the call when prompted.
What is to spread an option?
To spread an option, or to create an option spread, is to put on a corresponding short position onto your existing long position (or vice versa), in order to create options spreads with specific payoff profiles. For instance, if you bought a call option, it would have limited downside risk with unlimited profit potential. But if you sold an out of the money call option on top of that call option, you would create a call spread which lowers capital outlay but also limited upside profit potential.
How do you dial a collect call?
In the US and Canada, you can make a collect call from a pay phone (or any other phone) by dialing 0 plus the area code and number. (You always have to dial the area code, even if it's the same.) However, you are at the mercy of the owner of the pay phone as to which long distance company they chose, as to what rates will apply to the call. You can override that selection by dialing a 7-digit long distance company code, 101xxxx, for example 1010288 for AT&T, before 0+area+number. You can also place a collect call by dialing just 0 (for short-distance calls) or 00 (for long distance), but the rates will generally be noticeably higher than if you dial the number yourself. Many companies also offer collect calling via a toll-free number (800, 888, 877, 866, or 855). You dial the company's toll-free number and follow the prompts to place a collect call to the number you are trying to reach.
How long do you pay for mortgage insurance premium?
You have the option to get a mortgage insurance for the length of your mortgage contract, or you can choose 10 years, 15 years, 20 years, 40 years, etc.
How long does it take to get premium on minecraft?
To get a premium account? I don't get what you're saying. You buy premium membership for your accounts.
How long does a creditor have to collect an outstanding car insurance bill?
they usually call on it for six months then sell it to another collection agency. more then likely thell call for atleast a year
How long do lenders in Florida have to collect on a judgment?
hoe long do lenders have to collect on a judgement in fla.
