In this blog post we will discuss more advanced options trading strategies:Vertical Spreads andStraddles and Strangles.Don't worry! The usual formulation is that the buyer of an option has the right, but not the obligation to buy or sell the shares involved.
You may choose to sell shares at that price if Apple has fallen below 420 when the option expires, or before then if you choose. Most holders of profitable puts simply liquidate them in the market to realize the gain without further cost or effort if the stock price falls below the strike price.
For a more detailed explanation please take a look at the previous blog post).We can limit our risk, if we BUY a $420 put option. In our example you can sell it at $420.When SELLING a put option, you have to BUY the underlying stock at the strike price.
The cheaper the options, the lower the break-even point and the faster you'll be "in the money".That's why many charting software packages provide powerful "scanners".
When I was trading options back in 1989, I analyzed all options of the 30 stocks in the Dax with my Casio calculator.
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