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The buyer of a put is either believes the price of the underlying equity will fall below the strike price before the excersise date and hopes to profit or the buyer is simply protecting a long position.
The writer of the put believes the underlying security will trade flat to higher over the lifetime of the contract and has the goal of simply collecting the premium.
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A put writer can also have the goal of buying securities at a discounted price.
Say I believe Joe's Windows is going to sell for $50.50 per share on February 1. Right now (we'll say right now is September) it's selling for $54. I also know Joe's is a cyclical industry--Joe doesn't sell very many windows in February because no one wants to replace windows when it's cold outside, but he sells a lot of them in May. I think Joe's is going to sell for $65 per share in May. So I sell a put for a thousand shares of Joe's with a $51 strike price and a February 1 expiration date, and a premium of $1 per share. In automated options trading, if the stock price is five cents or more lower than the strike price the option is automatically exercised. I put the $1000 premium in my brokerage account. On February 1, the stock price was $50.90; the option exercised. My brokerage account balance went down by $51,000, my portfolio went up by 1000 shares of stock, and there are three happy campers: the person who sold me the stock because he's $51,000 richer; the broker, who gets a commission from the trade; and me because after the $1000 premium is subtracted I really only had to pay $50,000 for that stock. And I'll be even happier on April 14, because after Joe's new warehouse opens and the stock price shoots up to $70 per share I'll have even more of a profit than I was planning!
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What is the vega of an option?
Option Vega is the change in the value of an option for a 1-percentage point increase in implied volatility, i.e. the first derivative of the option price with respect to volatility.
How do you put in sine on a calculator?
Most scientific calculators come with a button that says SIN, or they have it under a secondary option usually accessed by pressing the SHIFT or 2ND first then the key sub labeled SIN.
What is the gamma of an option?
The rate of change for delta with respect to the underlying asset's price. Mathematically, gamma is the first derivative of delta and is used when trying to gauge the price of an option relative to the amount it is in or out of the money. When the option being measured is deep in or out of the money, gamma is small. When the option is near the money, gamma is largest.
Hoose the best Spanish word to complete the sentence Estamos a.mirándolo b. mirarlo c. miramoslo d. mirando lo?
Well, taking in account those 4 choices one could say that it is the option A. Now, the logical way into choosing option A is discarting, in which: Option B is the infinitive form of the verb "mirar" and thus can`t be used with the plurar verb "estamos". Option C is not a conjugated verb since the correct form is "mirèmoslo" Option D is the same as option A but eithout the accent, and because the accent rule determines that every word stressed on the third to last syllabe should be accentuated, then option A would be the correct choice.
What one is centimeters length wingspan or mass?
There is no such measure as a centermeter.A centimetre is a measure of distance so a wingspan seems a reasonable option (for an insect).There is no such measure as a centermeter.A centimetre is a measure of distance so a wingspan seems a reasonable option (for an insect).There is no such measure as a centermeter.A centimetre is a measure of distance so a wingspan seems a reasonable option (for an insect).There is no such measure as a centermeter.A centimetre is a measure of distance so a wingspan seems a reasonable option (for an insect).
What is American put Option?
An American put option can be exercised at any time during its life. The European put option can only be exercised at the end of the contract period.
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.
What is an option buy?
An option buy is when you buy an option, whether call option or put option, using the Buy To Open order.
What is the option to sell stock at a specified time in the future called?
A Put option
Is providing insurance a call or a put option for the insurer?
When you buy an insurance on your asset, you are essentially buying a put option on your asset for protection much like the Protective Put options trading strategy. As such, to the insurer, they are actually selling a naked put option to the buyer of the insurance.
What are stock option agreements?
Stock option agreements are what you apply before you actually put money on the market. it is the finalization before you put your business out there. You can choose from many.
What are some examples of a put option?
A put option or a put is a contract between two parties made so that they can exchange assets. They set a specific price for it and set a specific date of expiry or maturity.
What are the factors that affect currency put option and currency call option premiums?
go to yahoo stocks
How do you change the price call option and put option?
Once you enter into the contract, you can't change the price.
What is a stock option verb with 3 letters?
"put"
How do you view header row in Excel after building a very long list?
Use the Freeze Panes option. Put the cursor just under the header row and set the Freeze Panes option to be on, and then when you scroll down, the header rows will remain on the screen. You can also use the Split option, but this is not really for that purpose.Use the Freeze Panes option. Put the cursor just under the header row and set the Freeze Panes option to be on, and then when you scroll down, the header rows will remain on the screen. You can also use the Split option, but this is not really for that purpose.Use the Freeze Panes option. Put the cursor just under the header row and set the Freeze Panes option to be on, and then when you scroll down, the header rows will remain on the screen. You can also use the Split option, but this is not really for that purpose.Use the Freeze Panes option. Put the cursor just under the header row and set the Freeze Panes option to be on, and then when you scroll down, the header rows will remain on the screen. You can also use the Split option, but this is not really for that purpose.Use the Freeze Panes option. Put the cursor just under the header row and set the Freeze Panes option to be on, and then when you scroll down, the header rows will remain on the screen. You can also use the Split option, but this is not really for that purpose.Use the Freeze Panes option. Put the cursor just under the header row and set the Freeze Panes option to be on, and then when you scroll down, the header rows will remain on the screen. You can also use the Split option, but this is not really for that purpose.Use the Freeze Panes option. Put the cursor just under the header row and set the Freeze Panes option to be on, and then when you scroll down, the header rows will remain on the screen. You can also use the Split option, but this is not really for that purpose.Use the Freeze Panes option. Put the cursor just under the header row and set the Freeze Panes option to be on, and then when you scroll down, the header rows will remain on the screen. You can also use the Split option, but this is not really for that purpose.Use the Freeze Panes option. Put the cursor just under the header row and set the Freeze Panes option to be on, and then when you scroll down, the header rows will remain on the screen. You can also use the Split option, but this is not really for that purpose.Use the Freeze Panes option. Put the cursor just under the header row and set the Freeze Panes option to be on, and then when you scroll down, the header rows will remain on the screen. You can also use the Split option, but this is not really for that purpose.Use the Freeze Panes option. Put the cursor just under the header row and set the Freeze Panes option to be on, and then when you scroll down, the header rows will remain on the screen. You can also use the Split option, but this is not really for that purpose.
What position in call options is equivalent to a protective put?
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.
