The cap price is the level that the automatic exercise value of a capped option must reach in order for the option to be automatically exercised.
The cap price of a call option is above, and of a put option below, the exercise price of the option.
We empower millions of customers around the world to start and grow their businesses with our smart marketing technology, award-winning support, and inspiring content.
A covered call is executed when you buy the underlying stock/shares and then sell Calls against it. The trade is considered covered because the shares will cover what is now a short Call position. So this means the shorting/sale of the Calls was not “naked”. This method can be used to generate income using stock…
This is when you own shares in a particular stock and then you sell Calls against it and then buy Puts. You would use this strategy when you think that the stock rice is a little overdone and you are expecting some downside. This has limited risk due to the long put option, but also…
My name is Chris Corwin Gayle and I am a trader and Trading System developer. The purpose of this article is to break down the concept of Unusual Options Activity into simple language and show you exactly how to use it profitably. There are numerous sources online that are just outright misrepresenting what UOA is…
There are three ways that you can go about setting stops on your Options trades and all three methods work well whether you are day trading or swing trading. Method 1: Setting A Percentage (%) Stop Loss This is basically when you take an option trade and set a stop loss on the contract price…
