Open call option

Open call option

The price of the call contract must reflect the "likelihood" or chance of the call finishing in-the-money. Buy to open is essentially the opening of a long position, whether call or put, and a long position, as we've discussed elsewhere is any option call or put that you've purchased. The investor shorting the position is hoping the underlying asset or equity does not move beyond the strike price as this can allow him to keep the stocks and benefit from the long investor's premium. Instead of simply placing a "buy" or "sell" order as they would for stocks, options traders must choose among "buy to open," "buy to close," "sell to open" and "sell to close. Let us take a look at how we obtain this figure. An investor buys this option and hopes the stock goes higher so their option will increase in value.

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Call Options & Put Options Explained Simply In 8 Minutes (How To Trade Options For Beginners)

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Open call option

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