Covered Call Option Strategy Example | The Options Bro
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There are two types of options: call options and put options. A buyer of a call option has the right to buy the underlying asset for a certain price. The buyer of a put option has the right to sell the underlying asset for a certain price.
The stat() and lstat() functions take a filename argument. If the file is a symbolic link , stat() returns attributes of the eventual target of the link, while lstat() returns attributes of the link itself. The fstat() function takes a file descriptor argument instead, and returns attributes of the file that it identifies.
Recall that position Vega refers to the degree to which the strategy will suffer or gain from a change in volatility . In horizontal time spreads, since you are short the nearby month and long a back month (which could be the next month or later), you’ll have differential Vega on the options in the spread. That is, the back month option will always have more Vega than the front month because it has more premium.
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Definition of option contract : The right, but not the obligation, to buy (for a call option ) or sell (for a put option ) a specific amount of a given...
Every option represents a contract between a buyer and seller. The seller (writer) has the obligation to either buy or sell stock (depending on what type of option he or she sold -- either a call option or a put option ) to the buyer at a specified price by a specified date. Meanwhile, the buyer of an options contract has the right, but not the obligation, to complete the transaction by a specified date. When an option expires, if it is not in the buyer's best interest to exercise the option, then he or she is not obligated to do anything. The buyer has purchased the option to carry out a certain transaction in the future -- hence the name.
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Note: like most options strategies, covered calls can be sold in-the-money (ITM), at-the-money (ATM), or out-of-the-money (OTM). Writing covered calls that are ATM or OTM is by far the most popular.