Sentences with phrase «purchasing shares of the underlying stock»

And because you're collecting immediate income, you're lowering your cost basis on the shares you're buying, which means this strategy is actually safer than purchasing shares of the underlying stock outright.

This is precisely what makes this kind of trade safer than simply purchasing shares of the underlying stock the «traditional» way.

This is precisely what makes a «high - yield trade» safer than simply purchasing shares of the underlying stock the «traditional» way.

And because you're collecting immediate income when you open the trade, you're lowering your cost basis on the shares you're buying, which means this strategy is actually safer than purchasing shares of the underlying stock outright.

And because you collect immediate income, which lowers your cost basis, they're actually safer than purchasing shares of the underlying stock outright.

That's what makes this trade safer than simply purchasing shares of the underlying stock the «traditional» way.

Not exact matches

Contrary to a long put option, a short put option obligates an investor to take delivery, or purchase shares, of the underlying stock.

The diluted net income (loss) per share calculations include shares of Class A, Class A-1, and Class B common stock, as well as warrants to purchase shares of Class A and Class C common stock where the warrant exercise price is below the fair value of the underlying common stock and therefore would have a dilutive effect.

Selling, or writing, a put contract means you are obligated to purchase 100 shares of the underlying stock upon assignment.

When the stock is trading at $ 65, suppose you decide to purchase the 62 XYZ Company October put option contract (i.e. the underlying asset is XYZ Company stock, the exercise price is $ 62, and the expiration month is October) at $ 3 per contract (this is the option price, also known as the premium) for a total cost of $ 300 ($ 3 per contract multiplied by 100 shares that the option contract controls).

A call contract gives its owner the right to purchase 100 shares of an underlying stock at a predetermined price (the strike) prior to the expiration date of the contract.

Contrary to a long put option, a short put option obligates an investor to take delivery, or purchase shares, of the underlying stock.

Selling, or writing, a put contract means you are obligated to purchase 100 shares of the underlying stock upon assignment.

The mechanics of this strategy would be for Jack to purchase one out - of - the - money put contract and sell one out - of - the - money call contract, as each option represents 100 shares of the underlying stock.

Now, to correct this difference, the ETF arbitrageur (who are these guys anyway, are they big firms like Goldman) will short some shares of ETF, use the money to purchase the underlying basket of stocks, which will raise the price of underlying stocks, so that now SPY and the underlying mirror each other in price.

To purchase a call option with a strike price of $ 35 means placing a bet that the underlying stock price will increase to at least $ 35 per share before a certain date.

An option contract that gives its holder the right (but not the obligation) to purchase a specified number of shares of the underlying stock at the given strike price, on or before the expiration date of the contract.

APs create shares by purchasing a basket of the ETF's underlying component stocks and presenting the basket to the ETF provider in exchange for new shares.

Besides handling purchases and sales, the program needs to process a full range of transactions, including receipts of interest and dividends, stock splits, option expirations and conversion of derivative securities, such as options, warrants and convertible bonds, into their underlying stock shares.