Sentences with phrase «sell shares of the underlying stock»

For call options, the options holder can demand that the options seller sell shares of the underlying stock at the strike price.

The seller of a call option, also referred to as a writer, is obligated to sell the shares of the underlying stock at the strike price if a buyer decides to exercise the option to buy the stock.

If assignment occurs or the strike price is in - the - money at expiration, then the writer is obligated to sell the shares of the underlying stock at the option contract's strike price.

Conversely, when you sell a call option, you must sell shares of the underlying stock at the specified price when the option is exercised.

A put option gives its owner the right to sell shares of the underlying stock at the strike price.

It gives them the right to sell shares of the underlying stock at the strike price prior to the expiration date.

When the stock declines, they have the right to sell their shares of the underlying stock at a higher specified price - and walk away with a profit.

Not exact matches

For example, if company ABC and XYZ are both selling for $ 50 a share, one might be far more expensive than the other depending upon the underlying profits and growth rates of each stock.

Taxation Of Distributions Besides taxes on capital gains incurred from selling shares of ETFs, investors are also subject to pay taxes on periodic distributions, which can be dividends paid out from the underlying stock holdings, interest from bond holdings, return of capital (ROC) or capital gains — which come in two forms: long - term gains and short - term gainOf Distributions Besides taxes on capital gains incurred from selling shares of ETFs, investors are also subject to pay taxes on periodic distributions, which can be dividends paid out from the underlying stock holdings, interest from bond holdings, return of capital (ROC) or capital gains — which come in two forms: long - term gains and short - term gainof ETFs, investors are also subject to pay taxes on periodic distributions, which can be dividends paid out from the underlying stock holdings, interest from bond holdings, return of capital (ROC) or capital gains — which come in two forms: long - term gains and short - term gainof capital (ROC) or capital gains — which come in two forms: long - term gains and short - term gains.

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

When you sell a covered call, also known as writing a call, you already own shares of the underlying stock and you are selling someone the right, but not the obligation, to buy that stock at a set price until the option expires — and the price won't change no matter which way the market goes.1 If you didn't own the stock, it would be known as a naked call — a much riskier proposition.

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

Until the shares underlying the preferred stock and shares underlying the warrants are registered, they may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state laws.

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

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

Listed stock options contracts control the right to buy or sell 100 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.

So, if you exercise a call, you're buying 100 shares of the underlying stock; if you exercise a put, you are selling the underlying 100 shares at a stated price — known as the «strike price.»

With ETFs, for example, following the dictates of supply and demand, they buy the component stock to assemble new shares, or dismantle shares to sell the underlying stock.

In other words, if I already like the underlying stock — and if I think it's already trading at a reasonable price — then if I'm «stuck» holding shares at expiration (April 24) then that's perfectly fine with me: I can simply collect the stock's growing dividend while waiting for a new opportunity to sell another round of covered calls.

Selling calls is a riskier situation because you do stand to lose money if the price of the underlying stock's shares increases.

A brokerage based IRA which may own shares of stock must have the underlying stock holdings sold first and then a waiting period of between 3 to 5 days must transpire for the sale transactions to clear before an IRA can be cashed out.

In other words, if I already like the underlying stock — and if I think it's already trading at a reasonable price — then if I'm «stuck» holding shares at expiration (May 15) then that's perfectly fine with me: I'll simply collect a growing dividend while waiting for a new opportunity to sell another round of covered calls.

If, however, you sell options calls or puts, you have the obligation to trade shares of the underlying stock.

The reason, I believe, is so obvious as to sound simplistic: When a stock is selling close to the «intrinsic» value of its underlying company's shares, it does not have to travel down very much to find a floor.

A covered call option strategy is implemented by selling a call option contract while owning an equivalent number of shares of the underlying stock.