Sentences with phrase «share 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.

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

When either of these types of equity options is exercised, a physical delivery of shares of its underlying stock from one party to another takes place.

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

When you purchase a call option, you are paying for the choice to buy shares of an underlying stock at a specified price by a certain date.

The strike price on the call limits the amount you can pay for shares of the underlying stock.

ETFs don't create or retire shares of underlying stocks or bonds.

The covered call is a strategy in which an investor / trader writes or «sells» a call option contract while simultaneously owning an equal number of shares of the underlying stock.

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

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

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.

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.

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.

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

A dividend reinvestment plan (DRIP) is a plan is offered by a corporation that allows investors to reinvest their cash dividends into additional shares or fractional shares of the underlying stock on the dividend payment date.

Selling, or writing, a call contract means you are obligated to deliver 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.

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.

For put options, it is the converse, where the options holder may demand that the options seller buy shares of the underlying stock at the strike price.

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.

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.

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

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.

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.

If you're interested in day trading stock options for a living it's important to be aware the contracts are based on 100 shares of the underlying stock.

Options almost always control 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.»

Options contracts typically represent 100 shares of the underlying stock.

The final step in my analysis was to take the options volume and multiply it by 100 because each option represents 100 shares of the underlying stock.

It is «uncovered» (or «naked») if you have not shorted an equivalent number of shares of the underlying stock.

Some critics have argued that since investors technically own the shares of the underlying stocks and they are taking the risks, they should be the ones receiving the fee income.

Typically, when an investor buys an options contract on stock, it is for 100 shares of the underlying stock.

For the sake of clarity, all examples in this guide assume that an option is for one share of the underlying stock.

For example, an equity options contract is generally based on 100 shares of the underlying stock.

Each option contract is equal to 100 shares of the underlying stock.

An option contract covers 100 shares of an underlying stock and includes a strike price and an expiration month.

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.

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

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.

If an ETF is trading at a value lower than the value of the underlying shares, investors can profit from that discount by buying shares of the ETF and then cashing them in for in - kind distributions of shares of the underlying stock.

When an investor writes a covered call, it means he owns at least 100 shares of the underlying stock.

An uncovered, or naked, call means the writer doesn't have possession of the 100 shares of the underlying stock.

Buying puts without owning shares of the underlying stock is a strategy an investor uses when the investor has a bearish speculation on the stock or ETF.

Place a trade using your brokers option trading screen to buy one of the selected put options for each 100 shares of the underlying stock you own.

Each option contract is for 100 shares of the underlying stock, so in this case the commission per share would be 40.5 cents.