Option Strategies
- Topics:
- Commercial Lending
- Source:
- New York Mercantile Exchange
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Overview: This article talks about various Option Strategies. Some of these are: Long At-the-Money Call, Short Out-of-the-Money Call, Covered Call, Ratio Write etc. It has been overviewed that long at-the-money call gives the holder the right, but not the obligation, to buy futures at a specific price for a specific period. The position profits if futures prices rally. Profits are unlimited on the upside; total risk is limited to the premium paid regardless of where futures trade. Increasing volatility, while the passage of time works against it helps this trade. Hedgers of the underlying commodity can use buy-call strategies to lock in purchase prices and still participate in a price decline. Read the article to know the importance of futures and there implications in the corporate portfolio management.
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Format: HTML | Date: Jan 2003 | Pages: 1
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