When you sell a CALL, you give the buyer the right (but not the obligation) to buy 100 shares of stock from you at the option strike price at any time during the life of the option (this is called "assignment". You are "assigned" if the buyer "exercises" his option). If you do not own the shares and you get assigned, you will be short 100 shares. When you sell a PUT, you give the buyer the right (but not the obligation) to sell you 100 shares of his stock at the option at the strike price at any time during the life of the option.
Cool, thanks. That does help clarify it. We have the next class tomorrow night, and i think it is going to be all about options again.
Sjonas50 - You say you're taking some free classes that have been useful? Would these be TradeSmart University Classes? I have a few buddies that are trying out their Free Level 1 Program... it's pretty impressive they give away 12 hours of free information. Let me know who you're learning from... thanks and best of luck to you
yeah, its from tradesmart u. I am in the free course as well. The last class was pretty cool. We went through a real trade that they made last week with google. It was cool because it was a recent event and they showed screenshots from when they were entering the trade, and why they were entering. One of the things I always see is, yeah, its super easy to read a chart after its drawn, looking in hindsight. Thats why this was so cool becuase the chart was not drawn yet, so they explained what was happening, what they were looking at, and why they entered. Then they showed the outcome of the trades a few days later, and why they exited. I will say, these guys are pretty impressive. They do have a sales pitch for $795 for their complete training, which i've heard is comparable to OTA and Bettertrades several thousand dollar course. I havent bought it yet... havent decided yet. But still 3 more classes.
So did you ever decide to buy their program? Or did you find it too simplistic? Interested to find out....