Still well below the strike price of those underwater stock options that were replaced.
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CBs are trading so far beneath their strike price that the option is worthless.
So the strike price of the call you sell is the upper bound on your potential gain.
Mr Davey said discussions on the strike price were ongoing, but he expected them to be concluded shortly.
Stock options give holders the right to buy shares at a specified price, known as the strike price.
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Plus, you can set your strike price on the basis of your sentiment.
Other optimists opted to pick up 10, 000 calls at the nearer-term September 26 strike price at a price of 95 cents each.
Looking at our example, this trade would have a bearish bias as we have targeted 205 for our strike price.
Since your investment can't fall further than the "strike price" you've selected, you're effectively setting a floor on your losses.
Trading traffic is heaviest in the front month where investors are picking up out-of-the-money calls at every available strike price.
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Buying puts allows you to sell or put the stock to someone else at the strike price you have purchased.
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Options are generally granted for a seven-to-10-year period at a strike price equal to the share price on the grant date.
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The more volatile the share, the higher this premium since the share is more likely to rise above the option's strike price.
Additional bullishness was seen as high as the January 2010 27 strike price where some 3, 500 calls were purchased for 80 cents per contract.
If the shares reach the strike price, you are obligated to sell.
This strategy has limited risk: If the stock climbs to the sky, you simply deliver your shares at the strike price to fulfill the contract.
It was pretty widely well-known where the company was issuing options, where the strike price was, which was one way to estimate value.
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These breakeven points are arrived at by adding and subtracting the price paid for the long straddle to and from the strike price.
However, the primary point from a risk management perspective is: am I comfortable selling the stock at the strike price plus the premium received?
This means that you are selling someone else the right to buy it at a stated strike price on or before a future date.
One way to play it would be to buy insanely out-of-the-money calls on the index, say 15-year options with a strike price of 40, 000.
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Calls are option contracts that can give buyers an inexpensive bet that a stock will rise above a specified "strike price" before a specified date.
In option trading, the strike price and liquidity are key considerations.
The quite popular Black-Scholes calculator figures the value of warrants using current price, strike price, time until expiry, interest rate risk and share volatility as variables.
The subsequent surge in Harley-Davidson shares inspired the investor to sell the now in-the-money call options and roll the bullish stance to a higher strike price.
Notable bullish call buying was seen at the August 150 strike price where more than 1, 000 calls were scooped up for an average premium of 3.56 apiece.
Early bird investors looking to share in the bullishness surrounding TIVO looked to the June 10 strike price and bought more than 3, 000 calls for a premium of 68 cents apiece.
With the strike price of the option set a long way above prevailing levels, they will have reckoned they could convert the debt into equity at ever giddier prices.
In fact, this pin is more like rolling a gutter ball, as it refers to a situation in which a stock closes at a strike price on expiration day.
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