Still well below the strike price of those underwater stock options that were replaced.
FORBES: Mega Stock Option Time Bombs Go Off at Sirius XM and Starbucks
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.
WSJ: Oracle's Ellison Tops List of 25 Highest Paid CEOs of Decade
Buying puts allows you to sell or put the stock to someone else at the strike price you have purchased.
FORBES: Options Strategies For When Your Love For A Stock Fades
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.
WSJ: The Weekend Interview With Barry Silbert: So Who Needs Wall Street?
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?
In option trading, the strike price and liquidity are key considerations.
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.
Despite preparatory work on the site being complete, EDF is waiting to agree the strike price with the government - for the nuclear power generated - before construction can begin.
Or, even better, I could turn around and sell an AAPL put, which obligates me to purchase AAPL at the strike price of the contract in the event I get assigned.
When I select a strike to sell, I make sure I am happy with where I capped my return in the event I get my shares called away and the stock exceeds the strike price.
He said he was not calling for "the instant abandonment of nuclear power" but "just for a pause, for the referral of the strike price negotiation to the Public Accounts Committee, other select committees or to an independent panel of experts".
In simple terms, you can exercise your right to purchase the stock at the strike price (call away) with a Call and you have the right to sell the stock at any time (put to someone) at the strike price at any time by purchasing a Put.
Mr. Jackson's bet: that, because the strike price entitled an investor to own Kimberly-Clark shares at a price lower than the stock's current market price, the investor who bought the call options would exercise the contracts before the ex-dividend date to capture the company's 60 cent-a-share payout (recently increased to 66 cents).
WSJ: Running With Scissors: Another Way Dividends Can Boost Your Stock Portfolio
The reason this is a good time frame is that it gives you enough time so that if the stock price moves toward the strike price of the put early on, the call will likely retain a good portion of its premium and vice versa, which allows expansion of the spread and potential profit.
Robert Gordon, whose firm Twenty-First Securites specializes in tax-wise hedging strategies, says that a call strike price that is 15% to 20% above the put strike price should do the trick.
Moreover, he predicts that "the UK government's strong commitment to nuclear power and to energy security means the 'strike price' will be set at a fair level to secure investment in the nuclear industry".
Since your investment can't fall further than the "strike price" you've selected, you're effectively setting a floor on your losses.
One investor looked to the September contract and shed 4, 500 puts at the September 30 strike price for a premium of 55 cents in order to finance the purchase of 4, 500 calls at the higher September 35 strike at a cost of 45 cents per contract.
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.
It seems that BA's core shareholders support him: the share price hardly moved when the strike was announced.
ECONOMIST: Christmas woes for Britain��s once-great flag carrier
If the underling price is closer to the strike of the purchased put then losses will occur at a faster rate as time passes.
However, if the underlying is nearer the price of the lower strike on the written put then profits will expand at a faster rate as time passes.
The trader sold 100, 000 puts short at the September 9.0 strike price for a premium of 35 cents apiece in order to finance the purchase of 50, 000 puts at the July 12 strike for 84 cents per contract.
应用推荐