Short option position. Long Put Position
Value Investing with Options!
Can You Close Short Option Trades Before Expiration? [Episode 315]
Short Options Short options, whether they be call options or put optionsare simply option contracts that you either sold or wrote. Either term is correct.
Long option positions are fairly easy to grasp, but short options can be a little confusing at first. Unlike, shorting stocks, holding a short option position doesn't by itself represent a bet on your part that a stock is going to go down.
Short Selling vs. These strategies also help to hedge downside risk in a portfolio or specific stock. These two investing methods have features in common but also have differences that investors should understand.
You profit on a short put position, in fact, when the stock trades higher or, at the very least, stays flat. Let's look at a couple of quick examples to short option position how a short option position works and why someone would want to set one up: Example 1 - Short Call The first example we'll use is a covered call.
You don't necessarily want to sell the shares at the current price, and you don't think the stock is going to be moving significantly higher any time soon. But it would be nice if you could figure out a way to squeeze a little extra profit out of your position. Example 2 - Short Put Here's an example of a short put, or one that you sold or wrote instead of one you purchased.
This specific trade is called a naked put.