Anticipations
A downward move in the underlying asset is anticipated.
Characteristics
Limited profit / unlimited loss.
Max profit - limited to the net credit received.
Max loss - unlimited.
Creating
Short a call option.
Example
Security(IBM) price - $100
Short 1 IBM 110 Call - $3
Max profit = $3 * 100 = $300
Max loss = unlimited
Option Position at Expiration
Comments
Sell ITM call option if very bearish, Sell OTM call option if
less.
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