Explain what option positions take a long view of a stock
Option positions that take a long view of a stock are those that profit from an increase in the underlying stock’s price over time. The two primary types of option positions that take a long view of a stock are:
Call options: A call option gives the holder the right, but not the obligation, to buy a specific stock at a predetermined price (strike price) on or before a specific date (expiration date). If the stock price increases above the strike price, the call option holder can exercise their option and buy the stock at the lower strike price, then sell it in the open market at the higher market price, realizing a profit.
Bull call spreads: A bull call spread involves buying a call option at a lower strike price and selling a call option at a higher strike price. This creates a limited-risk, limited-reward position that profits if the stock price increases above the higher strike price. The potential profit is limited to the difference between the two strike prices, minus the cost of the options.
In both cases, the option holder is betting that the stock price will increase over time, and profits from the increase in the stock price.
No mention of selling puts. C’mon man!