Options
Options
This is my little cheat sheet to help me keep the terminology between trading platforms an different lingo straight:
Zecco:Sell to Open -- To begin to Sell or Write an Option. You can sell or write a CALL (when you think the stock you own will go up) or a PUT (when you think the stock you own will go down). Used to create a Covered Call (when you own stock and sell a call option for additional income with risk of limiting your upside)
So 4 types of basic options:
- Writer can sell a CALL
- Writer can sell a PUT
- Buyer of a CALL
- Buyer of a PUT
A Buyer tends to have a long position or view of the stock, the Seller or Writer tends to have a short view or position of the stock.
Buyers of the options have the OPTION, not an obligation to exercise the strike price.
Writers/Sellers ARE obligated to buy or sell if an option is exercised by the buyer deciding to exercise an option.
Okay, that makes some sense but it is a bit abstract. Now some scenarios to make it come to life.
CachedSince:{ts '2024-10-12 02:15:15'}