Profit and loss potential of call option writers
December 11, at 4: December 7, at December 26, at 3:
If fact, for the option buyer to be profitable the market should move away from the selected strike price. Trading Systems 10 chapters. If yes what premium they will square off?
Now sure which data points you are talking about. March 31, at 8: The mirror image of the payoff emphasis the fact that the risk-reward characteristics of an option buyer and seller are opposite. May 9, at 3:
A ocean to learn!! We will understand how the force gets influenced by the markets and how the Option Greeks further influences the premium. You need a margin only when you sell options. February 13, at September 6, at
In some of your replies, you mentioned that the profit is calculated as per the difference of profit and loss potential of call option writers price and strike price and in some replies u mentioned that it is as per the difference of premium. Likewise the call option buyer has unlimited profit potential, mirroring this the call option seller has maximum loss potential We have placed the payoff of Call Option buy and Put Option sell next to each other. Try and imagine this — the Option Greeks influence the option premium however the Option Greeks itself are controlled by the markets. July 10, at 9: Is it due to difference in premium received or in other words due to moneyness of the option?
They are very similar with very little difference I guess. You can square off anytime you wish…. January 1, at 7: Please note — the negative sign before the premium paid represents a cash out flow from my trading account.