Oh, no-- now we have to sell options? If you've understood the mechanics of buying options, you're already halfway there in comprehending the selling of options. All that's left is to reverse your role as from a buyer to a seller.
Just as stated before, the key elements to options transactions remain constant: the strike price, expiration, and option's premium. By selling a call option, the seller sells the right to the buyer to purchase the unit of stock from him/her at the set strike price, when the market value of the stock is greater than the strike price at or before expiration. The seller sells the option price with the assumption that the stock's price will move down or stay the same. In this case, the seller will profit from the premium he/she has collected.
The probability of success with options is determined by the movement of the stock. For buying calls, if the stock's price...
Ninteen year-old trader, future connoisseur of options.
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