abhishreshthaa
New member
OPTIONS STRATEGIES:
Long Call
Bullish Speculation
Long Put
Bearish Speculation
Married Put
Bullish to very bullish.
- Long Call
- Long Put
- Married Put
- Protective Put
- Covered Call
- Covered Put
- Bull Call Spread
- Bear Put Spread
- Collar
Long Call
Bullish Speculation
- The investor buys such a call option instead of buying the underlying security comparing the lower cost of buying a call contract versus an equivalent amount of stock as a form insurance.
- The investor protects himself against rise in the price of the underlying security and gets his purchase price locked by taking a Long Call.
- Maximum Profit is UNLIMITED.
- Maximum Loss is LIMITED to the extent of Option Premium paid.
Long Put
Bearish Speculation
- The investor buys such a Put Option instead of actually owning the underlying security and making profit out of downward movement of the same.
- “ Short Selling”
- The investor willing to sell his securities at a future date due to some reason protects himself against fall in the price in underlying security and gets his selling price locked by taking a Long Put.
- Maximum Profit is LIMITED by stock declining to Zero.
- Maximum Loss is LIMITED to the extent of Option Premium paid.
Married Put
Bullish to very bullish.
- The investor employing the married put strategy wants the benefits of stock ownership (dividends, voting rights, etc.), but has concerns about unknown, near-term, downside market risks.
- Purchasing puts with the purchase of shares of the underlying stock is a directional and bullish strategy.
- The primary motivation of this investor is to protect his shares of the underlying security from a decrease in market price.
- He will generally purchase a number of put contracts equivalent to the number of shares held.