There are two types of option contracts – Call options and Put options. A Call option is where you have the right to buy the underlying stock if you choose to exercise your option. A Put option is where you have the right to sell the underlying stock if you choose to exercise your optional right.
The Basic of Options Trading
Sick of being broke? How Options Trading can make you a living.
The options contracts themselves can be on-sold to other investors, which is where successful options traders generate their profits.
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This call ratio Backspread stratgy applied in 2 circumstances:-
1)When a trader sell 1 at the money call.
2) When a trader bbuy 2 or more out of the money call.
Call Ratio Back Spread Strategies
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A short call happens when a trader foresees that the value of the currency pair may go down and thus sells short the currency pair or “writes” or “grants” a call. An investor who decides to sell a call is obliged to sell the currency pair to the call buyer at the latter’s option. If the currency value indeed decreases, the call position earns a profit via the premium. If it however increases more than the exercise price and the premium amount, the short loses an unlimited amount.
Option Play Book – Short Call Option
Learn about the 19 primary option trading strategies for trading options on commodity futures contracts.
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