We like to buy them at a discount to what we believe their fair value is, and then sell call options
with strike prices equal to what we feel their fair value is.
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.
Instead of submitting a limit order for your stock you can sell a
put with a strike price equal to your limit price.
For example, if John buys a call option on ABC
stock with a strike price of $ 12, and the price of the stock is sitting at $ 15, the option is considered to be in the money.
FriendFinder said it would be able to cancel 4.1 M of 6.4 M
warrants with strike prices ranging from $ 7 to $ 18 a share issued during the acquisition.
So, he enters into an offsetting transaction by buying an identical opposite transaction (buying an option to sell 100 shares of Company
XYZ with a strike price of $ 20 that expires in one year).
Again, however, we continue to have a put option defense below about 90 % of our stock holdings
with strike prices within a few percent of current levels, which should relieve any concern about unacceptably large downside exposure.
The investor first purchases a put option expiring in
June with a strike price of $ 30.00 for an option premium of $ 2.00.
For example, an ABC January 2008 25 call would refer to a call option on
ABC with a strike price of 25 that expires in January 2008.
In other words 10 % X $ 5 million loan = $ 500,000 worth of warrants the venture debt company can convert in the
future with the strike price equal to the valuation at the time of the loan.
Assuming an average price paid for the puts of $ 1.08, which was the last trade price in the option contract, someone plunked down $ 1,620,000 to buy puts on
HYG with a strike price set at $ 80.
For example, assume an investor owns one put option on hypothetical stock
TAZR with a strike price of $ 25 expiring in one month.
You could sell a call option on Phillips 66 that expires in
March with a strike price of $ 85, which trades for about $ 0.90.
He finds that the January $ 27.50 put option (meaning a put option expires in
January with a strike price of $ 27.50) is trading at $ 2.95, and the January $ 35 call option is trading at $ 2.
The option
with strike price K of $ 50.00 has a net intrinsic value of $ 500.00, since it may be exercised over 100 shares (100 * [$ 55.00 — $ 50.00]-RRB-.
So if you buy 1 call option on Coca -
Cola with a strike price of $ 45.00, this give you the right (but not the obligation) to purchase 100 shares of Coca - Cola for a price of $ 45.00 each.
It looks as though Eric Sprott's firm obtained their stake via Orsu's offering on April 16th, 2010 where they were also granted 5,700,000
warrants with a strike price of C$ 0.5, exercisable on or before the 16th of April 2012.
For example, let's say John Doe sells an option to buy 100 shares of Company
XYZ with a strike price of $ 20 per share.
The prevailing evidence is consistent with a high expected return / risk profile for stocks, but the still «early» improvement in market action and the unusual nature of the current downturn suggest that we maintain something of a «stop loss» in the form of continued put option coverage,
with strike prices within a few percent below current levels.