Making Money By Selling Call Options ☝
Selling call options. https://ift.tt/SdH3dq PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! A chart explaining how the payoff works. If you buy a call option you get the right but not the obligation to purchase that stock at a certain price at some point in the future. It is a bullish approach to the markets. If you're selling a call option - you don't have the right; you are obliged to do whatever the buyer does but selling means that you're getting premium (i.e. a fee). Some people will sell call options; it doesn't necessarily mean you're bearish, you could be neutral to bearish on the stock. The advantage of selling is of course that your receive a fee or premium for doing so. So if the stock price doesn't go over a certain level you will make money. How to Sell a Call Option Example XYZ stock is trading at $20 A $20 dollar call is trading at $10 If on the expiry date the stock price is $20 there is no value to the call option But what if we were the seller of that option? If you sell call options you are limiting your profit potential, however you are on the hook for unlimited losses. Why would sell a call option then? The chance of an option expiring worthless is actually quite high and if you get a decent premium for it its not that bad.
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