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    Call options

    What do long/short positions in call options mean? An investor that buys call options benefits when the price of the underlying asset is higher than the strike price of the option at expiry. The writer of the call option has the opposite pay-off potential and receives a fixed option premium when they sell the contract.

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    Put options

    An investor that buys put options benefits from this position when the price of the underlying asset is lower than the strike price of the option at expiry. Conversely, if at expiry the price of the underlying asset is higher than the strike price, the option expires with no intrinsic value and the investor’s loss is equal to the option premium paid.

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    Options strategies (protective collar)

    Besides buying or selling single options, there are many other possible strategies that involve positions in multiple options simultaneously, as well as combining options with positions in the underlying assets.

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    Options strategies (long straddle)

    Besides buying or selling single options, there are many other possible strategies that involve positions in multiple options simultaneously, as well as combining options with positions in the underlying assets.

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    Options volatility

    Volatility is an important concept in the context of option trading, but it’s also one of the more complex ones to understand. In financial markets, volatility captures the amount of fluctuation in asset prices and is generally calculated as the annualized standard deviation of daily price changes, normally expressed as a percentage. To convert the […]

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