There's plenty of risk involved with a short straddle, which is why these premium-selling strategies are reserved for experienced option traders with margin accounts. By selling both a call option ...
when a trader sells to open a call option (a "short call"), it's a bet the stock will stay at or below the strike price through expiration. In other words, this premium-selling strategy reveals ...
Selling put options can be an attractive strategy to generate a nice premium, but you have to be able to withstand the risks. When you sell a put, you’re agreeing to purchase the stock at the ...
One strategy for earning income with derivatives is selling (or "writing") options to collect premium amounts. Options often expire worthless, allowing the option seller to keep the entire premium ...
Options trading is inherently risky. Both buying and selling options carry higher risks than those prevalent in the stock market. This increased risk stems from several factors. Firstly, options ...
The call owner can exercise the option, putting up cash to buy the stock at the strike price. Or the owner can simply sell the option at its fair market value to another buyer before it expires.