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Stock Options Trading Puts and Calls --
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BUYING CALLS
(BUYING CALL OPTIONS) BULLISH STRATEGY Maximum Risk/Reward Potential Risk: Loss of premium you paid. Reward: Essentially unlimited. |
SELLING CALLS
(SELLING CALL OPTIONS) BEARISH/NEUTRAL STRATEGY Maximum Risk/Reward Potential Risk: UNLIMITED. Reward: The amount of premium you initially received. |
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BUYING PUTS
(BUYING PUT OPTIONS) BEARISH STRATEGY Maximum Risk/Reward Potential Risk: Loss of premium you paid. Reward: Essentially unlimited. |
SELLING PUTS
(SELLING PUT OPTIONS) BULLISH/NEUTRAL STRATEGY Maximum Risk/Reward Potential Risk: UNLIMITED. Reward: The amount of premium you initially received. |
All options strategies just combine one or more of the above four alternatives. Some strategies may also include long or short stock positions (e.g., selling covered calls), which can then change the risk/reward potential.
A Core Position is defined as a core or basic position in a readily tradable item, including such things as precious metal (PM) bullion or coins, stocks, mutual funds, exchange traded funds (ETFs), etc. Whatever it is you are trading will here be called the "item".
A Core Position Account comprises a quantity of the item AND a cash reserve position. The cash reserve position enables purchases adding to the quantity of the item from time to time. Proceeds of the sales of some of the item, from time to time, are added to the cash reserve position. The cash reserve position enables purchases adding to the quantity of the item from time to time...
Core Position Trading™ (CPT) is defined as buying or selling, adding to or subtracting from, the core position of the item in such a manner as to, over time, increase both the amount of the item AND the cash in the account.
More about Core Position Trading
TOPICS & ARTICLES
Glossary
Core Position Trading
AIM Stock Buy & Sell Calculator
Technical Analysis
Stocks and ETFs
Stop, Limit, Stop Limit Orders
Stock Options
Options - The Very Basics
Options Premium Intrinsic & Time Value
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