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Dividends don't play into call options.
If you sell a covered call and it expires worthless, you'll receive any dividends from the stock because you still own the stock. If it's exercised, the new owner receives them because the stock is hers now.
The money that changes hands when you sell a call is the "premium," and the person who sells the call gets that.
What else can I help you with?
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.
When do you sell a call option?
There are a couple of times you'd do it. The first is if you want to automatically lock in a gain. Let's say you have a stock you bought at 15, and you want to double your money on the investment. So you sell a call at 30 with a long expiration date...oh, maybe a year. If at any time the stock crosses the $30 threshold, you exercise the option. You can also use short calls and long puts (sell a call, buy a put) as a hedging strategy. And then there's the call you sell when you just want to make money by collecting premiums--you sell a call at a higher price than you think the stock will reach, and hope it doesn't go that high.
If a itm call option is 9 and the share is trading at 10 it is itm but why do you say that a 9 put is otm if the share price is 10 what is the history to this seemingly inconsistancy?
When a stock is at $10, a $9 strike price call option allows you to buy that stock at $9, which is $1 cheaper than the market price, hence it is in the money (ITM).Now, when a stock is $10, a $9 strike price PUT OPTION allows you to SELL that stock for $9 when you can actually sell it for $10, so there's no value in it, right? (why would anyone want to sell a stock at $9 when he can sell it for $10, right?) That is why it is out of the money (OTM).It is not an inconsistency but that you did not understand that options moneyness for call and put options are the reverse.
Difference between put option and call option?
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.
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.
What happens if I don't sell my call option before it expires?
If you don't sell your call option before it expires, you may lose the opportunity to profit from it. The option will expire worthless, and you will lose the premium you paid for it.
What time can you sell shares to qualify for the dividend?
You can sell shares to qualify for the dividend on or after the ex-date (ex-dividend date), which will be announced the company
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.
How can I sell to close a call option before its expiration date?
You can sell to close a call option before its expiration date by placing an order to sell the option through your brokerage account. This allows you to exit the position and realize any profits or losses before the option reaches its expiration date.
What is the option to sell shares of stock at a specified time in the future called?
It's actually called a call option. I will provide you with a definition I just found for this, and some additional tips on options trading. - - - - - The option to sell shares is a put. The option to buy them is a call.
If you sell a stock on the ex dividend date do you still get the dividend?
yes!
What are the differences between buying a call and selling a call option?
Buying a call option gives you the right to buy a stock at a specific price, while selling a call option obligates you to sell a stock at a specific price.
What is sell a covered call?
A covered call means that you own the underlying stock on the option you are selling. Say you own 100 shares of apple computer. You sell ONE call option which allows the buyer of the option to purchase the underlying 1oo shares of stock at the strike price. If the contract matures, you can then deliver the stock to the option buyer.
If an investor buys stock on the ex-dividend date will that individual receive the dividend?
No, the definition of ex-dividend date is trading without the dividend. Any stock purchased "ex-dividend" date is not entitled to the dividend. AND equally as importantly OFFSETTING this - is the insatnt that happens the stock price is reduced by the amiunt of the dividend being paid. NO you cannot "steal" a dividend - that is buy it the day before the divideden gets paid (or ownership date actually) - and sell the day after - all you do is get the dividend and the equally lower stock value.
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.
Can you sell the stock after ex-dividend date or after record date?
You can sell the stock whenever you want, but you need to own it on the date of record to get a dividend. That means you need to buy it BEFORE the ex-dividend date.
Can you sell the stock after ex dividend date or after record date?
if you sell shares on ex div. date,before the record do you still receive the dividend
