Options Trading for Beginners: A Crash Course On How To Build A Passive Income In 2020 And How To Trade Stocks For A Living. Become A Swing Trader RIGHT NOW by Robert Douglas

Author:Robert Douglas [Douglas, Robert]
Language: eng
Format: azw3, epub
Published: 2020-07-13T16:00:00+00:00

This is a straightforward strategy that has limited losses and profits with comparatively low upfront costs.

Profit is achieved when the price of the associated asset is equal to the strike prices of the short call. The formula for this is:

Width of the two Strike Prices - Net Premium Paid - Commissions Paid = Profit

Loss occurs when the stock price goes above the strike price on or before the expiration date. This is calculated with this formula:

Net Premium Paid + Commissions Paid = Loss

Breakeven is calculated like this:

Strike Price of Long Put + Net Premium Paid = Breakeven

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