Etrade option trade
A strategy in which an investor writes a call option contract while at the same time owning an equivalent number of shares of the underlying stock. In this video, we'll show you how to spot covered call opportunities and build your trade.
You'll also learn how the trade behaves under a variety of different market scenarios.
Why So Many Investors Lose With Options -- The Motley Fool
Review the fundamentals of covered calls before you execute your first trade. Watch this online demo to learn how to place an options trade on etrade. Call our dedicated Options Service Team at Options transactions are complex and carry a high degree of risk.
They are intended for sophisticated investors and are not suitable for everyone. For more information, please read the Characteristics and Risk of Standardized Options brochure before you begin trading.
Also, there are specific risks associated with covered call writing including the risk that the underlying stock could be sold at the exercise price when the current market value is greater than the exercise price the call writer will receive. A covered call writer foregoes participation in any increase in the stock price above the call exercise price and continues to bear the downside risk of stock ownership if the stock price decreases more than the premium received.
Moreover, there are specific risks associated with buying options including the risk of the purchased options expiring worthless. Also, there are specific risks associated with selling cash secured puts including the risk that the underlying stock could be purchased at the exercise price when the current market value is less than the exercise price the put seller will receive.
There are specific risks associated with trading spreads including substantial commissions, because it involves at least twice the number of contracts as a long or short position and because spreads are almost invariably closed out prior to expiration. Multiple-leg options including collar strategies involve multiple commission charges.
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Options investors may lose the entire amount of their investment in a relatively short period of time. The material is being provided to you for educational purposes only. System response and account access times may vary due to a variety of factors, including trading volumes, market conditions, system performance, and other factors.
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Covered Call A strategy in which an investor writes a call option contract while at the same time owning an equivalent number of shares of the underlying stock Sentiment Profit Potential Risk Potential Neutral to Bullish Limited Substantial. How to Place a Covered Call Pro Market Advisors 1 In this video, we'll show you how to spot covered call opportunities and build your trade. Covered Call Options Industry Council 1 Review the fundamentals of covered calls before you execute your first trade.