Welcome To Options Trading For Newbies



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Options Trading For Newbies
BUTTERFLY SPREAD - A strategy involving four contracts of the same type at three different strike prices. Along (short) butterfly involves buying (selling) the lowest strike price, selling (buying) double the quantity at the central strike price, and buying selling) the highest strike price. All options are on the same underlying, in the same expiration.
BUY WRITE - See COVERED CALL.
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CALENDAR SPREAD - The simultaneous purchase and sale of options of the same type, but with different expiration dates. This would include horizontal debit spreads, horizontal credit spreads, diagonal debit spreads, and diagonal credit spreads.
CALL - This option contract conveys the right to buy a standard quantity of a specified asset at a fixed price per unit (the strike price) fora limited length of time (until expiration).

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