Option writing uncovered puts - maximum gain is the premium.
Maximum loss is the strike less the premium.
The break-even point is the strike less the premium.
A form of option writing or selling in which the seller owns neither the underlying security nor a different option on that same security with the same (or later) expiration date and higher striking price.
Covered Call Option Writing
A strategy in which one sells call options while simultaneously owning an equivalent position in the underlying security. This strategy does not limit risk.
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Uncovered put option writing: A short put option position in which the writer does not have a corresponding short position in the underlying security or has not deposited, in a cash account, ...
Uncovered call option writing A short call option position in which the writer does not own an equivalent position in the underlying security represented by his option contracts.
For obvious reasons, naked option writing is a risky strategy. Underlying Security The stock, commodity, or other financial instrument on which an option contract is based.
Investment income earned from interest, dividends, rent, premiums from option writing, and similar sources as opposed to that derived from increases in asset value.
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There are other strategies managed futures managers use, including discretionary strategies, fundamental strategies, option writing, pattern recognition, arbitrage strategies, etc.
A strategy of covered call writing in which the investor is striving to earn an additional return from option writing against a stock position which he (she) has targeted to sell -- possibly at substantially higher prices.
Incremental Return Concept - A strategy of covered call writing in which the investor is striving to earn an additional return from option writing against a stock position which he is targeted to sell-possibly at substantially higher prices.
Collateral: Collateral in general is stocks or other property that a borrower is obliged to turn over to lenders if they are unable to repay a loan. In respect to option writing, ...
Over a typical two-plus-year lifespan, you whittle down the net capital invested while retaining a valuable asset in the owned call. In the best cases, over the life of the owned call, you pull out enough cash from option writing to exceed the cost ...
option income fund A type of mutual fund that attempts to increase current income by continual option writing. option margin A margin requirement, as specified by Regulation T, that depends upon the type...
 See also: Option, Position, Options, Security, Long
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