Other Bullish Options Strategies
Here are some other ways to take a bullish position using options:
- Writing covered calls above market: Your client buys the stock - at the current market price - required for physical delivery, and then holds it until the option is exercised. Let's say the current price is $100 and the exercise price is $105. As long as the stock exceeds that exercise price prior to the expiration date, your client will profit.
- Writing uncovered puts: Writing a put is a similar strategy to buying a call. Your client is betting the stock price will go up.
Other Bearish Options Strategies
Bear strategies discussed earlier include buying puts and creating bear spreads. Here are some other ways to take a bearish position using options:
- Writing covered calls below market: Your client is betting the underlying stock price will drop below the strike price before the option is exercised.
- Writing uncovered calls: Writing a call is a similar strategy to buying a put. Your client is betting the stock price will go down.
Neutral strategies (discussed earlier) include creating straddles and combinations. Another way to take a neutral position is to write covered calls at market.
Long Term Equity Anticipation Securities (LEAPS)
TradingA brief overview of how to profit from using put options in your portfolio.
TradingA brief overview of how to provide from using call options in your portfolio.
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TradingWriting an option is the process of selling to another investor the right, but not the obligation, to buy or sell a stock at a given price in the near future. It can also be referred to as shorting ...
TradingLearn how analyzing these variables are crucial to knowing when to exercise early.
TradingThe standard covered call can be used to hedge positions or generate income. This calendar spread may do so more effectively.
InvestingThe strategy of writing covered calls on ETFs can limit your losses and hedge risk, but they cap your upside potential.