Define covered put option 76


Define covered put option 76


If an investor thinks the price of the instrument will fall, he can sell short the underlying instrument, as well as the corresponding call option. Please include your IP address in your email. I say generally because there are such a wide variety of option strategies that use define covered put option 76 legs as their structure, however, even a one legged Long Call Option can be viewed as an option strategy.Under cocered Options101 link, you may have noticed that the option examples provided have only looked at taking one option trade at a time.

How could a trader profit from such a scenario. When a protective put is used in conjunction with covered call writing, the strategy is referred to as a collar strategy. A collar in options trading is the owning of the underlying shares while simultaneously selling the call options and buying protective puts. In a true collar strategy the puts and calls are both out-of-the-money having the same expiration dates and equal number of contracts.

So we sell an O-T-M call and protect the dfine by purchasing a put.E.




Define covered put option 76

Define covered put option 76


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