Business / Taxes / Call Option: Buying a call option gives you, as owner, the right to buy a fixed quantity of the underlying product at a specified price, called the strike price, within a specified time period. For example, you might purchase a call option on 100 shares of a stock if you expect the stock price to increase but prefer not to tie up your investment principal by investing in the stock. If the price of the stock does go up, the call option will increase in value. You might choose to sell your option at a profit or exercise the option and buy the shares at the strike price. But if the stock price at expiration is less than the strike price the option will be worthless. The amount you lose, in that case, is the premium you paid to buy the option plus any brokerage fees. In contrast, you can sell a call option, which is known as writing a call. That gives the buyer the right to buy the underlying investment from you at the strike price before the option expires. If you write a call, you are obliged to sell if the option is exercised and you are assigned to meet the call.
Call Noun Synonyms: shout, cry, yell, whoop, holler
Call Verb Synonyms: shout, cry (out), hail, yell, roar, bellow, call out, holler
Option Adjective Synonyms: choice, privilege, election, opportunity, chance
Option Noun Synonyms: choice, selection, alternative, recourse, opportunity, way out
Business / Taxes / Naked Option: When you write, or sell, a call option but don't own the underlying instrument, such as a stock in the case of an equity option, the option is described as naked. Similarly, you write a naked put if y MORE
Business / Taxes / Uncovered Option: An uncovered option, also known as a naked option, is an option that is not backed by another position. For example, if you sell a call option without owning the stock that you would have to deliver i MORE