Advanced Options Strategies Explained

Advanced stock option strategies

Advanced stock option strategies


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Advanced Options Strategies Flashcards | Quizlet

Example: XYZ stock trades at $55 per share, and a call and a put at a $55 strike are available for $5 with an expiration in six months. Here’s the payoff profile of one synthetic long.

10 Options Strategies to Know - Investopedia

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Financial Planning - Advanced Strategies

Potential upside and downside: The short call caps the potential upside of this strategy at $755, which occurs at any stock price above $65 per share. That profit comprises the $555 profit on the long call and the $755 premium from the short call. The net cost of the trade is $855, which is the potential total downside if the stock stays below $55 per share.

Options Strategies - 26 proven options strategies

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​Trading naked options doesn't allow you the protection or room for the trade to go against you for a period of time. Many times stocks trade sideways and if you trade just calls and puts naked then you don't have much wiggle room for the trade to form.

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Strategies for options trading range from the simple to the complex — from basic one-legged trades to the four-legged monsters — but all strategies are based on just two basic option types: calls and puts. Each has its own upsides and downsides, and you might want to refresh your understanding of what a call option is and what a put option is.

Example: XYZ stock trades at $55 per share. A call at a $65 strike is available for $7, and a put at a $95 strike is available for $7, each with an expiration in six months. Here’s the payoff profile of one long strangle.


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