- D. A would be correct for an in-the-money option.
- A. II is at-the-money, not in it.
- A. The others are bearish strategies.
- D. The rest are false.
- C. The rest are false.
- B. Strangles use different strike prices, both of which are out of the money.
- A. Straddles are used when the investor is unsure of the market's direction
- B. Strike price + net premium. The mnemonic device is Calls Add to Lower (CAL)
- C A is incorrect as synthetic options utilize a combination of futures and options. A future obligates buyer and seller alike, whereas options obligate only sellers.
TradingHere is a quick introduction to four options strategies that traders should know.
TradingLearn how long straddles, long strangles and vertical debit spreads can help you profit from the volatility that stock analysts expect for 2016.
TradingForget straddles. These strangles are both liberating and legal in the investing world.
TradingLearn more about stock options, including some basic terminology and the source of profits.
TradingIn this strategy, traders cash in when the underlying security rises - and when it falls.
TradingDiscover the option-writing strategies that can deliver consistent income, including the use of put options instead of limit orders, and maximizing premiums.
TradingA look at trading options on debt instruments, like U.S. Treasury bonds and other government securities.
TradingA brief overview of how to profit from using put options in your portfolio.
TradingIf you can't trade commodity futures outright, these vehicles provide a less expensive alternative.