Combinations are trades constructed with both a call and a put. There is a special type of combination known as a “synthetic.” The point of a synthetic is to create an options position that behaves like an underlying asset, but without actually controlling the asset. Why not just buy the stock? Maybe some legal or regulatory reason restricts you from owning it. But you may be allowed to create a synthetic position using options.


In, At, or Out of the Money: If an option is in the money, its premium will have additional value because the option is already in profit, and the profit will be immediately available to the buyer of the option. If an option is at the money, or out of the money, its premium will not have any additional value because the options are not yet in profit. 

Equity options today are hailed as one of the most successful financial products to be introduced in modern times. Options have proven to be superior and prudent investment tools offering you, the investor, flexibility, diversification and control in protecting your portfolio or in generating additional investment income. We hope you'll find this to be a helpful guide for learning how to trade options.
learn to trade futures 72 futures trading newsletter 46 commodity trading newsletter 38 day trade futures 32 learn to trade options 31 treasury futures 31 financial futures report 29 e-mini S&P 28 stock index futures 27 futures day trading 26 learn to trade commodities 17 30-year bond futures 17 commodity options 13 free trading education 11 10-year note futures 11 stock market 11 sell options 10 commodity options book 10 treasuries 10 option broker 9
learn to trade futures 72 futures trading newsletter 46 commodity trading newsletter 38 day trade futures 32 learn to trade options 31 treasury futures 31 financial futures report 29 e-mini S&P 28 stock index futures 27 futures day trading 26 learn to trade commodities 17 30-year bond futures 17 commodity options 13 free trading education 11 10-year note futures 11 stock market 11 sell options 10 commodity options book 10 treasuries 10 option broker 9
So, call options are also much like insurance - you are paying for a contract that expires at a set time but allows you to purchase a security (like a stock) at a predetermined price (which won't go up even if the price of the stock on the market does). However, you will have to renew your option (typically on a weekly, monthly or quarterly basis). For this reason, options are always experiencing what's called time decay - meaning their value decays over time. 
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