This strategy has a low-profit potential if the stock remains above Leg 1 (strike price) at expiration. However, unlimited risk if the stock goes down. Description If the stock price declines below the strike price before the put option expires, the buyer of the option may exercise their right to sell the stock at the […]
The long put option is a bearish strategy that allows an investor to profit from a decline in the price of an underlying stock by buying a put option and selling the stock at a higher strike price if the stock price falls below the breakeven point Details: The long put option is a bearish […]
A long call option is a bullish strategy that involves purchasing a contract to profit from a price increase in the underlying asset. The buyer has the right to buy the asset at a predetermined price before the option expires. If the asset price increases, the buyer can exercise the option for a profit. If not, the option expires worthless and the buyer loses the premium paid.