That way, if the option owner assigns you to buy the stock, you will do so at the strike price of the option. The risk of a seller of a call is unlimited. A call option seller is getting paid up front for an obligation to SELL the underlying market to the call buyer at a certain price for a limited amount of time. Most exchange-traded options have stocks as their underlying asset but OTC-traded options have a huge variety of underlying assets bonds, currencies, commodities, swaps, or baskets of assets. And though the goal of put writing versus call writing is different in a strategic sense, the ultimate goal of increasing your overall gains — along with your overall wealth — is one and the same. There are special tax rules that apply to hedging employee stock options, and these are different from those that apply to hedging stock. The Process of Trading Be sure that you understand the mechanics of executing the necessary initial trades.
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