conversion type of arbitrage, options trading strategies. This strategy of buying stocks, buying and selling call options put option. These three steps simultaneously implemented. Put and call options with exercise prices equal to the amount of money that has been in the call option must be received from selling, buying put options. So, this strategy is that it only seems to stock only if the purchase is for the amount of money received after selling a call option is more than enough to buy a put option and, usually, it is extra After much of the rest of buying and selling call options put option. This strategy is the difference between the requirements for the bid put option and call option price must be less than the price difference between the ask and ask the current exercise price of stock options. Equation to describe the following requirements:
call bid options - to seek a put option price & gt; seek current stock price - pr ice
there option for the strike are three ways we are, This strategic order. Can be used to collar strategy is the strategy KORUPUTTOOPUSHON covered by triggering one single stock and triggering a combo strategy. All limit orders must be placed using. This option trading strategy after running, we need these positions only days left until the deadline. All three of these positions can be closed one or two days of the expiration of the previous few days with the option of buying and selling or closing exercise options.
as example, the company sold 60 of our cats May call options to buy 4.90 dollars and we put the option in the May 60 cats and USD 3.10 in the company& 39;s stock purchases and 61.35 USD. The difference between the call and put option price of 4.90 -3 .10 = 1.80. The difference between the stock price and the option& 39;s exercise price, 61.35 -6 0 = 1.35. So, the difference between the call and put option price is more than the difference between the stock price and the option exercise price. The differences in both of our net profit was 1.80 -1 .35 = .45. One can purchase contract, our income was USD 0.45 45 = 100 units. However, the Commission, this strategy is usually 90 trade dollars, the company& 39;s broker services we have to use it. So, we need to buy at least three contracts with profit.
so can earn money, how this strategy actually works? When you buy a put option we have, we actually we have to protect the stock purchase. Options for the purpose of marketing is to generate the money to buy KORUPUTTOOPUSHON. It seems after buying put options and selling call options, it is extra money in your account. But, in fact, we still necessary amount of the deposit, this strategy of running. So, after running this strategy, if the stock price declines, we put our options to protect the stock. If stock prices fall, in fact, expiration date, or sell a put option can be exercised to recover from the loss of purchasing all stocks. If the stock price goes up, expiration date, we just both put and call options expire worthless leave. However, in order to sell the call option, we have 60 exercise price, the buyer May 60, call options, we came to ask for a 60 dollar and stock, despite the current stock price higher than that. In order to sell the call option, the exercise price is 60 we are, we have the obligation to sell the stock buyer is 60 USD. If all of us do not own stock, we are in the market to buy shares at a higher price and sell it, and then on May 60 the option buyer. This is a cause we lost money. But do not worry, for our own stock, and what we need is we have only 60 dollars to sell stock, 60 call option buyer. Despite the current stock price is high, it is not something to lose from this strategy. Also, we have a small amount of profit. Why these differences can happen to the price of stocks and options. This is the price of stock options has its own supply and demand affected. It may be more of the stock options may be required, but this option makes it less demand.
the stock trading strategies, it is absolutely risk free. How changes in stock prices, the gain is fixed. We do not go on a honeymoon. The strategy& 39;s second advantage is that you can buy more of a cost of the contract. We will see if Penny is an accidental side of the road, if we all pick up and we keep them. However, the stock market, please see the difference when we are, we will multiply the small amount of shares to buy more units. But the truth is considerable disadvantages of this strategy. The first is a very disadvantageous position, most of the profits, usually 10 to 50 options cents per unit. The second drawback is the high price of the stock only chance. The third disadvantage is that this strategy of running, the Commission is high, typically, the entire transaction to USD 90. However, the disadvantage can be overcome by using a broker to the company charges less commission. The fourth round is in need of huge capital drawback of this strategy running. This is the high price that some contracts must be purchased shares, which can be run strategy.
alexander chong
author " option trading strategies & quot;
http: / / www.makemoneystocks.com/ faustino delaine
Bookmark it:
No comments:
Post a Comment