For example, if the stock price increases dramatically, the ETF would lose the opportunity to profit from the price increase beyond the predetermined price of
the corresponding call option.
In the Strategic Growth Fund, we've got put option coverage below nearly all of our stock holdings, but we are not short
the corresponding call options.
We've traded stocks like Texas Instruments (NASDAQ: TXN), PayPal (NASDAQ: PYPL), Microsoft (NASDAQ: MSFT), Square (NYSE: SQ), Twitter (NYSE: TWTR), STMicroelectronics (NYSE: STM) and Proofpoint (NASDAQ: PFPT) for short - term gains with
the corresponding call options raking in profits from 39 % to 202 % for quick holding periods.
Not exact matches
For example, if today (August 10, 2017) I purchase one
call for EWQ7, does this mean that at 4:00 p.m. ET on the last business day of this month I have the right (let's ignore that contrarian instructions are forbidden for weekly & end - of - month
options) to purchase the
corresponding ESU6?
If the underlying moves up and the
option expires, a
call option will now have a 100 Delta and the
corresponding put will have a 0 Delta.
At expiration, it is common for a brokerage to automatically exercise in - the - money
call options, which results in your purchasing the
corresponding amount of stock.
Like other types of binary
options, the only thing that determines the outcome of
Call / Put DSO binaries is the relation of two prices — the trading session opening price of the underlying instrument on the
corresponding stock exchange and the closing price of the underlying instrument on the
corresponding stock exchange at the end of the same trading session.
In fact, the Black — Scholes formula for the price of a vanilla
call option (or put
option) can be interpreted by decomposing a
call option into an asset - or - nothing
call option minus a cash - or - nothing
call option, and similarly for a put — the binary
options are easier to analyze, and
correspond to the two terms in the Black — Scholes formula.