4 Options Calls & Puts Flashcards by Brandy S | Brainscape

Q

Buy Call

Buy Put

A

Buy Call - purchase right to buy in future

Buy Put - purchase right to sell in future

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Q

Buy Call - u think $ will…

Buy Put - u think $ will…

A

Call - go up

Put - go down

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Q

Goal of selling a call or put

A

that it will not be exercised and

expire worthless

you keep premium

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Q

Buy Call

bear or bull?

A

bearish

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Q

Buy Put

A

Bearish

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Q

1 Coke Dec 25 call @ 3

define

A

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Q

Strike Price / Exercise Price

A

price option allows purcher to buy or sell

underlying security

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Q

Break Even

A

price of security + premium = 0 gain/loss

Breakeven same for buyer & seller

1 ABC Aug 50 call @ 2

breakeven = 52

(0 gain/loss)

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Q

In-The-Money

A

mkt price above strike price

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Q

Intrinsic Value

A

amt by which optio is

in-the-money

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Q

Premium

A

Amt paid for option

= intrinsic + time value

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Q

LEAPS

A

options w/ longer terms

12-39 mo.

high premiums

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Q

Buy

other words to describe

A

long

holder

owner

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Q

Sell

other words to describe

A

short

writer

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