The following story appears in the August 6, 2012 issue of Forbes magazine. Put options, which give holders the right to sell stock at a prearranged price, are complicated enough. Taking a short ...

Call option vs. put option explained. There are two main types of options: ... This involves buying a call option as a way to hedge your short position on the underlying asset.

The short call option’s profit is limited to the premium, but it has the risk of potential unlimited loss. How the Strategy of a Short Call Option Plays Out You write a short call option for a ...

Long Call Vertical Spread Explained Long Call Vertical Summary A long call vertical spread is a bullish position involving a long and short call with different strike prices in the same expiration.

A short strangle is an options trading strategy that involves selling a call option and a put option on the same underlying stock with the same expiration date. This article explains what that ...

Butterfly spread is an options strategy combining bull and bear spreads, involving either four calls or puts, with fixed risk and capped profit.

The options trader makes a profit of $200, or the $400 option value (100 shares * 1 contract * $4 value at expiration) minus ...

The options trader makes a profit of $200, or the $400 option value (100 shares * 1 contract * $4 value at expiration) minus the $200 premium paid for the call.