The strike price is the agreed cost per share that the holder may either buy or sell the underlying stock for when exercising the contract. The strike price remains the same until the contract expires and is critical in determining the contract's price.
A put option contract gives the owner the right (but not the obligation) to sell 100 shares of the asset at the strike price any time before expiration. If you sell a put option, you have the obligation to purchase those 100 shares from the owner.
A bear call spread is where a call is sold close to the current underlying price and the risk is fixed by purchasing another call with a higher strike price. A bear put spread is where a put is purchased close to the current underlying price and lower strike put is purchased to reduce the trade cost. [click to read more]
A strategy of combining bull and bear credit spreads to minimize the risk with the short option of each spread on a single strike price. The profit is also limited due to the increased probability of the trade to profit. Put's or calls can be used for this strategy.[click to read more]
When the right of an option was exercised by the investor, proceeds are delivered in a cash settlement rather than the underlying asset. The investor does not take physical possession of an underlying in this case, but conveniently receives a cash transfer equivalent to the strike price of the option.[click to read more]
The option chain organizes all options available for trading by expiration period and the strike price for an underlying security. Scouring option chains is a typical activity for any trader and require a great deal of time.[click to read more]
A call options trading strategy in which a neutralized position is established by writing high premium near month out of the money calls and buying simultaneously further month at the money call option contracts to take advantage of time decay of near term calls. The mo[click to read more]