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  2. Options strategy - Wikipedia

    en.wikipedia.org/wiki/Options_strategy

    Straddle - an options strategy in which the investor holds a position in both a call and put with the same strike price and expiration date, paying both premiums (long straddle). [ 3 ] Strangle - where you buy a put below the stock and a call above the stock, with profit if the stock moves outside of either strike price (long strangle).

  3. Straddle - Wikipedia

    en.wikipedia.org/wiki/Straddle

    A short straddle is a non-directional options trading strategy that involves simultaneously selling a put and a call of the same underlying security, strike price and expiration date. The profit is limited to the premium received from the sale of put and call. The risk is virtually unlimited as large moves of the underlying security's price ...

  4. Credit spread (options) - Wikipedia

    en.wikipedia.org/wiki/Credit_spread_(options)

    Finance. In finance, a credit spread, or net credit spread is an options strategy that involves a purchase of one option and a sale of another option in the same class and expiration but different strike prices. It is designed to make a profit when the spreads between the two options narrows . Investors receive a net credit for entering the ...

  5. How Does a Straddle Option Work? - AOL

    www.aol.com/news/does-straddle-option-180254569.html

    The straddle is an options trading strategy, so named for the shape it makes on a pricing chart; your position literally “straddles” the price of the underlying asset. With the straddle, you ...

  6. Strangle (options) - Wikipedia

    en.wikipedia.org/wiki/Strangle_(options)

    Strangle (options) In finance, a strangle is an options strategy involving the purchase or sale of two options, allowing the holder to profit based on how much the price of the underlying security moves, with a neutral exposure to the direction of price movement. A strangle consists of one call and one put with the same expiry and underlying ...

  7. Ladder (option combination) - Wikipedia

    en.wikipedia.org/wiki/Ladder_(option_combination)

    Ladder (option combination) In finance, a ladder, also known as a Christmas tree, is a combination of three options of the same type (all calls or all puts) at three different strike prices. [1] A long ladder is used by traders who expect low volatility, while a short ladder is used by traders who expect high volatility.

  8. Covered option - Wikipedia

    en.wikipedia.org/wiki/Covered_option

    Covered option. A covered option is a financial transaction in which the holder of securities sells (or "writes") a type of financial options contract known as a "call" or a "put" against stock that they own or are shorting. The seller of a covered option receives compensation, or "premium", for this transaction, which can limit losses; however ...

  9. Stock option return - Wikipedia

    en.wikipedia.org/wiki/Stock_option_return

    For example, for a put option sold for $2 with a strike price of $50 against stock LMN the potential return for the naked put would be: Naked Put Potential Return = 2/ (50.0-2)= 4.2%. The break-even point is the stock strike price minus the put option price. Break-even = $50 – $2.00 = $48.00.