Friday, 17 July 2015

OPTION CALLS TYPE

Short-Term Call Options
When an option trader buys a call option, trader has the right to buy the underlying at strike price before expiration. Keep in mind that just because the option trader has the right to buy the stock, doesn’t mean that trader has to necessarily do so. The call option just like a put option can be sold anytime up until expiration for a profit or loss
Bull Call Spreads
When implementing a bull call spread, an option trader purchases a call option at one strike and sells the same number of calls on the same stock at a higher strike with the same expiration date.
By implementing a bull call spread, traders can hedge their bets limiting the potential loss. This is the advantage when comparing to purchasing a call outright. Remember that there are no sure-fire ways to make money by using options. However, knowing and understanding the strategy is a good way to limit losses.
Long-Term Call Options
The long call option strategy is the most basic option trading strategy whereby the options trader buys call options with the belief that the price of the underlying security will rise significantly beyond the strike price before the option expiration date.

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