CBOE Equity Put/Call Ratio:

A put ratio backspread is a very bullish seasoned option strategy involving the sell and buying of puts, at different..x1ze4 Trends Advanced Topic:On the other hand, though, short call and short put traders would experience a gain from a decline in volatility.

You'll only end up losing money if the value of the underlying asset increases too much since you'll be forced to sell the asset at a strike price lower than market value.

Calculation

The Put/Call Ratio is an indicator that shows put volume relative to call volume. Put options are used to hedge against market weakness or bet on a decline.

After Yesterday's Decline of 3. More news for this symbol. Barchart Technical Opinion Weak sell. Business Summary Shake Shack Inc.

The company offers burgers, hot dogs, frozen custard, crinkle cut fries, beer and wine. Key Turning Points 2nd Resistance Point Want to use this as your default charts setting? Learn about our Custom Templates. Switch the Market flag above for targeted data. Open the menu and switch the Market flag for targeted data. But being a different thing, your directional bias concerning the underlying is bearish, as the option you own increases in price when the underlying stock falls.

When you buy and own a call option, you have a long call position. Your directional bias concerning the underlying is bullish, as the option you own increases in price when the price of the underlying stock rises. When you sell a call option with the intention to buy it back later for a lower price, you have a short call position. Your directional bias concerning the underlying stock is bearish, as the underlying stock going down makes the option you want to buy back cheaper, which makes you a profit.

When you sell a put option with the intention to buy it back later for a lower price, you have a short put position. Your directional bias concerning the underlying is bullish, as the underlying stock going up makes the option you want to buy back cheaper, which makes you a profit.

Of the four basic option positions, long call and short put are bullish trades, while long put and short call are bearish trades.

Whenever you buy and own something, you are long. It runs parallel to the payoff line but since it takes into account the price that was payed for the premium the cost of the call option it will be that far below the payoff line. Perhaps an example would be helpful: Let's say you are purchasing a call option for ABC stock X strike price: Now that we've got the first chart out of the way, we can move a bit quicker and show a few other charts.

Now we'll see what happens when you Short a Call sell a call option. Since you are writing the option, you get to collect the premium. You'll only end up losing money if the value of the underlying asset increases too much since you'll be forced to sell the asset at a strike price lower than market value.

Here's our nifty table: The chart doesn't really need a payoff curve since you're not the one holding the call option. The profit will hold steady at the premium until it reaches the strike price, at which point every dollar the asset gains is a dollar you will lose. Buying a put option gives you the right to sell the underlying asset at the strike price.

When you long a put buy a put , you will profit only if the price of the underlying asset decreases.

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