covered call, protective put and collar
TRANSCRIPT
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Covered Call
Protective Put
Collar
Option Strategies…. Bullish ….Chapter 1
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Write Call/ Moderately Bearish Buy Call/ Bullish
Write Put/ Moderately Bullish Buy Put/ Bearish
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First Step to make money from Options
• Write a option • If you write a call can be hegde by buying stock or
Future• If you buy future can be hedge by buying a put, to
meet the daily losses. • Written Put option can be hedged by shorting a future.• At the money option has maximum time value of
money
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•Write at the money or Out of the money call•Buy a stock or Future to hedge from the upside movemnet•If in the money call is bought , as stock or future will be bought according to current value and hence will ended up in making losses.
Strategy
•Break even: Stock Purchase – Premium•Maximum Profit: Limited to the Premium paid•Maximum Loss: Unlimited
BEP/Risk Reward
•Volatility Inc: -ve Effect•Volatility Dec: +ve Effect•Time decay Impact: +ve effect •Synthetic Long put.
Misc
Covered Call…. Neutral to Bullish
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•Buy the out of the Put and write a out of the money call •Already holding stock •It’s a directional Strategy
Strategy
•Maximum Loss: Limited to premium Paid for put•Maximum Gain: Unlimited
Risk Reward
•Volatility Inc: +ve•Volatility Dec: -ve effect•Break even: Purchase price + Premium Paid Misc
Reference Link :http://www.optionseducation.org/strategy/covered_call.jsp
Protective Put
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Explanation Answer/ Analysis
Red Shows in the money, green out of the money and blue shows at the money
Scenario Analysis
Graphical Representation
Summary …Investopedia
Summary
Detailed presentation for members and on request.
Presentation Cost along with Bull & Bear Spread: 350 and Hard Copy can couriered cost is 450
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