Series 7 Exam for Dummies, with Online Practice Tests by Steven M. Rice
Author:Steven M. Rice
Language: eng
Format: epub
ISBN: 9781119103769
Publisher: Wiley
Published: 2015-08-31T00:00:00+00:00
When you get an option question with several steps (like the preceding one), look for the action words to tell you what to do. Action words include
Buys, holds, owns, longs
Sells, writes, shorts
Exercises
Every time you see an action word, think of it as a clue to remind you that you have to put something in the options chart.
Short straddles and combinations
Short positions involve selling a call and a put with the same underlying stock. In straddles, the calls and puts have the same strike price and expiration month; with combinations, one of these values may differ.
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