José Luis López

Equity Option Strategies

Posted on: julio 28, 2010

The strategies listed here are a collection of worksheets, each of which includes a hypothetical example to illustrate possible strategy outcomes. Some of the strategies are also accompanied by interactive calculation applets. Access to, or delivery of a copy of the Options Disclosure Document must accompany these worksheets. These discussions and materials are for educational purposes only and are not intended to provide investment advice. Investment decisions should not be made based upon the examples included in these discussions and materials.

This worksheet covers speculative call buying to profit from an underlying stock price increase.

Buying Puts This worksheet covers speculative put buying to profit from an underlying stock price decrease.

This worksheet introduces the use of covered calls as a good investment tool for both increased return and limited downside price protection of a long position in the underlying stock.

This worksheet discusses the potential upside and downside benefits of writing a combination (short call and short put) covered by long shares of the underlying stock. See how flexible options can be as an investment tool.

This worksheet introduces the use of a long put for downside price protection of a long position in the underlying stock. Learn how buying protective puts might make good investment sense.

This worksheet introduces the use of writing cash-secured puts as a way to ultimately acquire underlying shares at a target price.

This worksheet covers equity collars used for downside price protection of an underlying stock position at a potentially lower cost than with a simple protective put.

This worksheet introduces the stock repair strategy as a means to reduce an investor’s break-even price on an existing long underlying stock position without having to assume any additional downside risk.

This is a very brief introduction to basic equity option concepts. For a more comprehensive discussion of these and other basic concepts of equity options please see the Education Center on this Website.

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options (ODD). Copies of the ODD are available from your broker, by calling 1-888-OPTIONS, or from The Options Clearing Corporation, One North Wacker Drive, Suite 500, Chicago, Illinois 60606. The information on this website is provided solely for general education and information purposes and therefore should not be considered complete, precise, or current. Many of the matters discussed are subject to detailed rules, regulations, and statutory provisions which should be referred to for additional detail and are subject to changes that may not be reflected in the website information. No statement within the website should be construed as a recommendation to buy or sell a security or to provide investment advice. The inclusion of non-CBOE advertisements on the website should not be construed as an endorsement or an indication of the value of any product, service, or website. The Terms and Conditions govern use of this website and use of this website will be deemed acceptance of those Terms and Conditions.


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julio 2010
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