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If the stock price ends at a price (P) above or equal to $ 105, both options will be exercised and your total profit per is equal to the sum of $ 5 from the original options trading, a loss of (P - $ 95) from the sold option, and a gain of (P - $ 105) from the bought option. Total profits will be
77:
that can be used when the options trader is moderately bearish on the underlying security. It is entered by buying call options of a certain strike price and selling the same number of call options of lower strike price (in the money) on the same underlying security with the same expiration month.
147:
The options trader hopes that the price of the underlying drops, maximizing his profit when the underlying drops below the strike price of the written option, netting him the difference between the strike prices minus the cost of entering into the position.
112:, the options may be exercised. If the stock price ends at a price (P) below or equal to $ 95, neither option will be exercised and your total profit will be the $ 5 per share from the initial options trade.
116:($ 5 - (P - $ 95) + (P - $ 105)) = -$ 5 per share (i.e. a loss of $ 5 per share). The loss is due to speculation that the price would go down but it actually did not.
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selling the same number of lower striking out-of-the-money put options on the same underlying security and the same expiration month.
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that can be used when the options trader is moderately bearish on the underlying security. It is entered by:
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of $ 105 for $ 2 and a call option with a strike price of $ 95 for $ 7. To implement a bear call spread, one
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that can be used when the options trader is moderately bearish on the underlying security.
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The total profit after this initial options trading phase will be $ 5.
61:(alternatively call credit spread). If constructed using puts, it is a
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194:(4th ed.). New York : New York Institute of Finance.
98:
buys the $ 105 call option, paying a premium of $ 2, and
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A bear call spread is a limited profit, limited risk
132:
A bear put spread is a limited profit, limited risk
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sells the $ 95 call option, making a premium of $ 7.
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Consider a stock that costs $ 100 per share, with a
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buying higher striking in-the-money put options and
128:Profit diagram of a bear spread using put options
49:, a bear spread can be constructed using either
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8:
274:
244:
230:
222:
1069:Power reverse dual-currency note (PRDC)
1009:Constant proportion portfolio insurance
57:. If constructed using calls, it is a
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1004:Collateralized debt obligation (CDO)
65:(alternatively put debit spread).
25:
192:Options as a Strategic Investment
1123:
831:Year-on-year inflation-indexed
216:Not All Call Buying is Bullish
190:McMillan, Lawrence G. (2002).
1:
841:Zero-coupon inflation-indexed
1044:Foreign exchange derivative
436:Callable bull/bear contract
168:Ladder (option combination)
1172:
1118:
945:Stock market index future
259:
1064:Mortgage-backed security
1059:Interest rate derivative
1034:Equity-linked note (ELN)
1019:Credit-linked note (CLN)
134:options trading strategy
108:After the options reach
75:options trading strategy
1014:Contract for difference
315:Risk-free interest rate
796:Forward Rate Agreement
129:
27:In options trading, a
1156:Derivatives (finance)
1024:Credit default option
368:Employee stock option
127:
978:Inflation derivative
963:Commodity derivative
935:Single-stock futures
925:Normal backwardation
915:Interest rate future
756:Conditional variance
262:Derivative (finance)
1130:Business portal
983:Property derivative
988:Weather derivative
973:Freight derivative
955:Exotic derivatives
875:Commodities future
562:Intermarket spread
325:Synthetic position
253:Derivatives market
130:
1151:Options (finance)
1138:
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1039:Equity derivative
1029:Credit derivative
997:Other derivatives
968:Energy derivative
930:Perpetual futures
811:Overnight indexed
761:Constant maturity
722:
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669:Finite difference
602:Protective option
218:, OptionsZone.com
16:(Redirected from
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900:Forwards pricing
674:Garman–Kohlhagen
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69:Bear call spread
59:bear call spread
40:options strategy
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1100:Great Recession
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1049:Fund derivative
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910:Futures pricing
885:Dividend future
880:Currency future
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694:Put–call parity
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617:Vertical spread
552:Diagonal spread
522:Calendar spread
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120:Bear put spread
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63:bear put spread
47:put–call parity
37:vertical spread
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890:Forward market
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567:Iron butterfly
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537:Covered option
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475:Mountain range
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699:MC Simulation
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659:Black–Scholes
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612:Risk reversal
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542:Credit spread
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466:Interest rate
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905:Forward rate
816:Total return
704:Real options
620:
607:Ratio spread
587:Naked option
547:Debit spread
378:Fixed income
320:Strike price
191:
146:
131:
114:
107:
104:
92:strike price
85:
72:
62:
58:
55:call options
44:
28:
26:
836:Zero Coupon
766:Correlation
714:Vanna–Volga
572:Iron condor
358:Bond option
158:Bull spread
88:call option
51:put options
45:Because of
29:bear spread
1145:Categories
1110:Tax policy
826:Volatility
736:Amortising
577:Jelly roll
512:Box spread
507:Backspread
499:Strategies
335:Volatility
330:the Greeks
295:Expiration
184:References
163:Box spread
110:expiration
801:Inflation
751:Commodity
709:Trinomial
644:Bachelier
636:Valuation
517:Butterfly
451:Commodore
300:Moneyness
940:Slippage
870:Contango
854:Forwards
821:Variance
781:Dividend
776:Currency
689:Margrabe
684:Lattices
663:equation
649:Binomial
597:Strangle
592:Straddle
489:Swaption
471:Lookback
456:Compound
398:Warrants
373:European
353:American
345:Vanillas
310:Pin risk
290:Exercise
152:See also
859:Futures
479:Rainbow
446:Cliquet
441:Chooser
421:Barrier
408:Exotics
270:Options
90:with a
82:Example
33:bearish
920:Margin
786:Equity
679:Heston
582:Ladder
532:Condor
527:Collar
484:Spread
431:Binary
426:Basket
198:
178:Option
791:Forex
746:Basis
741:Asset
728:Swaps
654:Black
557:Fence
416:Asian
278:Terms
31:is a
625:Bull
621:Bear
363:Call
196:ISBN
393:Put
53:or
1147::
623:,
383:FX
35:,
665:)
661:(
627:)
619:(
245:e
238:t
231:v
204:.
20:)
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