A Debit Spread means two options with different market prices that an investor trades on the same underlying security. The higher priced option is purchased and the lower premium option is sold - both at the same time. The higher the debit spread, the greater the initial cash outflow the investor will incur on the transaction. Although there is an initial loss on the … [Read more...]
Archives for March 2010
Credit Spreads
There are two simple ways to define Credit Spreads. These are as follows : The spread between Treasury securities and non-Treasury securities that are identical in all respects except for quality rating. An options strategy where a high premium option is sold and a low premium option is bought on the same underlying security. For instance, the difference between … [Read more...]
Free Stock Tips for 11th March 2010
The Various – Daily Stock Recommendation Given by the various analysts and Stock Brokers are : Abhishek Industries Ltd. - Daily stock recommendation 11-03-2010 Source Action Tip Period Target Price (Rs.) Anil Singhvi Buy, stop loss Rs 14 - 15.50 Pantaloon Retail (India) Ltd. - Daily stock recommendation 11-03-2010 Source Action Tip Period … [Read more...]
Bear Spreads [Explained]
There are two ways to define Bear spreads, which are as follows : An option strategy seeking maximum profit when the price of the underlying security declines. The strategy involves the simultaneous purchase and sale of options; puts or calls can be used. A higher strike price is purchased and a lower strike price is sold. The options should have the same expiration date.2. … [Read more...]
Bull Spreads
A Bull spread is an option strategy in which maximum profit is attained if the underlying security rises in price. Either calls or puts can be used. The lower strike price is purchased and the higher strike price is sold. The options have the same expiration date. You make a lot of money if the stock rises. You lose it all if it doesn't. It's one of those higher risk … [Read more...]