Stock Options: Difference in Buying and Selling a Call or a Put

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38 COMMENTS

  1. Sell a put is like you acting like as a insurance company….. where you collect premium and wait… before expiration if stock goes up… the person who bought the put from you will not cliam anything as he is safe since his stock went up and you get to keep the premium he paid for you…… but before expiration if stock goes down… the person who bought the put when you sold … he will claim to you that stock gone down can you pay me the difference …. i better understood this concept after watching video …. thanks SHASHA EVDAKOV

  2. If I want to buy a hundred shares of a certain stock on sale I whould want to use a put option correct and if it goes up on the other person I’m still able to get it at a discount right that what I’ve been reading

  3. I''m not sure you are using the term 'unlimited down side' correctly. Losing all your money isn't unlimited down side. Buying a short on a stock and having it go up to some unlimited value is unlimited.

  4. hi nice video.. quick question.. if I "buy to open" a option for strike price 45$ expiring 3 months later and "sell to close" option next week if stock reaches 47$ .. i know I get the profits but do I still need to buy the 100 stocks if I don't want to? thanks

  5. Sasha;

    Here is what I am not understanding. A person buys a call option, they expect the stock to rise, say the strike price is $50 and in 60 days the stock goes to $80. The call buyer paid a $200 premium and the contract is for 100 shares. After 60 days, the buyer collects $30 X 100 = $3000 minus $200 for the premium. That a $2800 return in 60 days.

    WHO PAYS THE BUYER HIS $2800?

    Is the person who SOLD him the option shelling out $2800 from their own trading acct?

  6. Good grief. This is the most convoluted explanation of the differences between calls and puts. Beginners will be utterly confused by this and seasoned traders will find no value add in this. While this is doubtless a worthwhile effort, the presentation of the material needs to be streamlined to attain a baseline level of clarity.

  7. When you say unlimited gain do you mean within time frame? What is confusing me, do you have to buy the stock at the end of time frame option on a put or a call when your out of the money or does the option expire and your out?

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