Profit diagram for the buyer of a put option mortgage
A put option is the right, but not the obligation, to sell an asset at a prespecified price on, or before, a prespecified date in the future.Long PutThe payoff diagram of a put option looks like a mirror image of the call option (along the Y axis). If the stock is above the strike at expiration, the put expires worthless. A profit and loss diagram, or risk graph, is a visual representation of profit diagram for the buyer of a put option mortgage possible profit and loss of an option strategy atThis article needs additional citations for verification.
Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (November 2015) ( Learn how and when to remove this template message)In finance, a put or put option is a stock market device which gives the owner of a put the right, but not the obligation, to sell an asset (the underlying), at a specified price (the strike), by a predetermined date (the expiry or maturity) to a given party (the seller of the put).
Please help to improve this article by introducing more precise citations. (March 201) ( Learn how and when to remove this template message)In finance, a straddle refers to two transactions that share the same security, with positions that offset one another. One holds long risk, the other short. As a result, it involves the purchase or sale of particular option derivatives that allow the holder to profit based on how much the price of the forex volatility pairs compare security moves, regardless of the direction of price movement.A straddle involves buying a call and put with same strike price and expiration date.
If the stock price is close to the strike price at expiration of the options, the straddle leads to a loss. However, if there is a sufficiently large move in either direction,Option TypesThere are two types of option contracts: Call Options and Put Options.Call Options give the option buyer the right to buy the underlying asset.Put Options give the option buyer the right the sell the underlying asset.The simple examples so far have only been call options i.e. giving you the right to buy the underlying asset.
That is why these two types of option contracts (Calls and Puts) exist.In our previous example, Peter bought a call option from Sarah. Peter also could have bought a put option from Sarah.