protective put, covered calls, straddle, spreads,
and collars. explain how these strategies work, and
provide a specific...
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Finance
protective put, covered calls, straddle, spreads,and collars. explain how these strategies work, andprovide a specific example.
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Protective put When the underlying stock is held and put options on the stock are bought This strategy will cap the losses on the stock For example Stock A is owned which is currently trading at 50 Put options with strike price of 48 are bought In this case if the price of Stock A falls below 48 the gains on the put option will offset the loss on the stock The selling price of the stock is locked in at
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