The Money Naked Call is a warrant that is uncovered and is in the money. This means that the trader has only the option warrant and not the associated stock package. Thus, these options, or these tactics, fall under the category of the plus500 speculative use of the warrants, since there is no cover. Options that are made out of the money are usually very cheap and show little change in value, whereas options in the money represent the course much better.
Whether an option in the money is based on the so-called Strike value, this is practically the price limit for an option slip, from which the illusion gains in value, among which usually hardly a Copy Trading noteworthy course development of the appearance takes place.
The use of money naked calls is useful when hedging short sales. So if shares have to be repurchased quickly, but their price can still rise, then a naked call is exercised. If the price continues to rise, the options are gaining in value, which is practically a hedge against a poor sales trend. The return on sale itself is, of course, reduced by the option premium; If, however, due home even to the lever of the warrant, the performance of the underlying is 1: 1, the hedging strategy will cease. However, this can only be the case if the price of the underlying is above the strike value. As soon as it falls below it, the option shows almost no value change and therefore worthless.
In the case of classic options, however, value development is generally not so simple. In addition to a volatility-dependent component, the value is also reduced by the time value decline. Over time, the option is simply less value. The risk with the Money Naked Call is therefore that you can not really predict the time of the price development, but the same also applies to the development of the course itself. In order for the option to land in the money, two criteria must be etoro fulfilled:
- The change will be strong, so the resulting volatility must 24option be high.
- The change must be made quickly so that the time value decline is low.
These criteria apply, of course, only to classic warrants. In this case, it is assumed that the option practically only ends up in money if the losses from the sale of shares are compensated. This is at least the case when you use the naked calls as a hedging instrument.
In the area of binary options, the entire distinction between options that are in the money and that are outside the profit area is eliminated, since you can not acquire binary options that are already in the money. It is, as is well known, a digital paper, which thus knows only one output in money when the return is distributed and a final state with a loss of capital. Therefore, binary IQ Option options are also not subject to any time value decline or share price developments that may be listed on the stock exchange.
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This means that only one call can be exercised with binary options, whereby there are also various options for different types of trading. The Ladder options are anyoption most appropriate for the Money Naked Call described here. These are call options with dynamic price limits at different intervals. Call options can be exercised on each of these price limits, with the return being dynamic. The behavior of these options corresponds most closely to the classic warrants, but there is no real value development here. As soon as the price at the end of the term is above the strike (ie the price limit of the Ladder option), the investor will receive the (?) Fixed yield. Otherwise, the option is worthless and expires without the trader seeing his capital again.
In the case of binary options, trading is therefore very much easier, since no longer has Social Trading to be distinguished between calls from money and money. This allows for better planning of trading activities. In addition, profits and losses are clearly stated and