DERIVATIVES-BASICS4 MIN READ
Call and Put Rights Cheat Sheet
Recall the rights and obligations of long and short calls and puts.
Core grid Call versus put: what is the buyer's right? Start with the holder's right. The writer's obligation is the opposite side of that right. Long call What does a long call give the holder? The right to buy the underlying at the strike before or at expiration, depending on exercise style. The buyer pays premium and can let the option expire if exercising is not useful. Long put What does a long put give the holder? The right to sell the underlying at the strike before or at expiration, depending on exercise style. A protective put can act like…
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