Related Book Series 7 Exam For Dummies, 2nd EditionBy Steven M. RiceThe most basic options calculations for the Series 7 involve buying or selling call or put options. Buying or SellingMaximum LossMaximum GainBuying a callPremiumUnlimitedSelling a callUnlimitedPremiumThe key buy a call option formula to remember when working with call options is calls same, which means that the premium and the strike price go on the same side of the options chart.
How to buy call optionsThe following stepsThis article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. You might have had success beating the market by trading stocks using a disciplined process that anticipates a nice move either up or down. Many traders have also cxll the confidence to make money in the stock market by identifying one or two good stocks that may make a big move soon.
You profit on a call when the underlying asset increases in price. These are tax management, income generation and speculation. How Options WorkAn options contract gives the holder the right to buy 100 shares of the underlying security at a specific price, known as the strBetter Together. Never miss a trending story with yahoo.comas your homepage. Every new tab displays beautiful Flickr photos and your most recently visited sites. The long call option strategy is the most basic option trading strategy whereby the options trader buy call options with the belief that the price of optioon security will rise significantly beyond the strike calk before the option expiration date.
Long Call Ofrmula 1 ATM CallLeverageCompared to buying the underlying shares outright, the call option buyer is ableto gain leverage since the lower priced calls appreciate in value faster percentagewisefor every point rise in the price of the underlying stockHowever, call options have a limited lifespan. If the formulw stock price does not move optiin the strike potion before the option expiration date, buy a call option formula call option will expire worthless.