Friday 23 November 2012

COVERED CALL OPTION

Selling the call obligates you to sell stock you already own at strike price  if the option is assigned. One can run this strategy after they have already seen nice gains on the stock. Often, they will sell out-of-the-money calls, so if the stock price goes up, they are willing to part with the stock and take the profit....

Wednesday 21 November 2012

HEDGING FUTURE WITH OPTION

Hedging in common words is insuring against a negative event. This doesn't prevent a negative event from happening, but if it does happen and you're properly hedged, the impact of the event is reduced.
 HEDING FUTURE WITH OPTION
 1.Note the size of your futures position and buy a corresponding number of options.....

Monday 19 November 2012