This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. The sale of put options can be an excellent way to gain exposure to a stock on which you are bullish with the added benefit of potentially owning the stock at a future date at a price below the current market price. To understand how selling puts may benefit your investment strategy, pkt quick primer on options may be helpful to some.TUTORIAL: Options BasicsCall Options Vs.
Put OptionsVery simply, opyion equity option is a derivative security that acquires its value from the underlying stock it covers. Owning a call option gives you the right to buy a stock at a predetermined price, known as the option exercise price. The article Getting To Know The Greeks discusses risk measures such as delta, gamma, theta and vega, which are summarized put option vs short position 61 figure 1 below.
This article takes a closer look at delta as it relates to actual and combined positions - known as position delta - which is a very important concept for option sellers. Delta is one of four major risk measures used by option traders. Delta measures the degree to which an option iOptions can open up a whole new world of tax complexities, if consequences of certain actions are not understood in advance.
The basics of reporting options trades are presented in this article, ahort with a lead-in to some of the more complex situations.
Put option vs short position 61