Sell Call

  • When? - The market is expected to go slightly low, but not go up.
  • Strategy? - Sell a call option of the strike below which you expect the market to go
  • Advantages? - Profitable even if we are slightly wrong (Market moves down and slightly up)
  • Disadvantages? - Unlimited loss 
  • Max Profit? - Premium Received
  • Max Loss? - Unlimited
  • Break-even point? - Strike + Premium received






Comments

Post a Comment

Popular posts from this blog

Bull Call Spread

Image
When? -  The market is expected to go slightly high, but the chance of going in a downward direction. Strategy? -  Buy a call option and sell a higher strike call option Advantages? -  Losses can control in both directions Disadvantages? -  More margin required  Max Profit?  - Strike difference - net premium Max Loss?  - Net premium Break-even point?  - Lower Strike + Net Premium
Read more