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Buy to Open vs Buy to Close

What is Buy to Open vs Buy to Close? We look at these two similar, but not exactly the same, concepts. There are two ways you can participate in the options market: you can buy or you can sell. This sounds simple enough. Except there’s more to it: when you buy or sell, you can also either open or close.

Sell to Open vs Sell to Close

What is Sell to Open vs Sell to Close? We look at these two similar, but not exactly the same, concepts. There are two ways to participate in the options market; you can either buy or sell. But you can also buy/sell to open or to close. Below we go through what these terms mean and which is the most appropriate.

 

The Synthetic Covered Call Options Strategy Explained

Synthetic positions in options trading is the use of options and/or stocks in order to produce positions that are equivalent in payoff characteristics as another totally different position. So, can we to produce the payoff characteristics of one of the most popular options strategies, the Covered Call, without buying the underlying stock?

Call Option Payoff

A call option payoff depends on stock price: a long call is profitable above the breakeven point (strike price plus option premium). The opposite is the case for a short call. A call option payoff diagram shows the potential value of the call as a function of the price of the underlying asset usually, but not always, at option expiration.

Avoid Market Crash Drawdowns with Options

stock market crash occurs when there is a significant decline in stock prices. While there's no specific numeric definition of a stock market crash, the term usually applies to occasions in which the major stock market indexes lose more than 10% of their value in a relatively short time period. Preventing portfolio drawdowns is important for several reasons.

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