Call option is a popular option among long-term investors. When you own the stock, you can sell the call option to get extra income.

This strategy can be used when long-term investors think that their stocks will not increase much in the future, or there is a specific profit-taking price. When the stock price falls or the option volatility rises, the risk appears.

2. Buy at retail

Premium collar (put spread collar) hedging means that when you have a stock portfolio, you buy put options outside the purchase price and sell call options outside the purchase price, and the prices of the two options are the same.

When investors think that the market is fluctuating, they can sell call options to offset the cost of put options, but the upside is limited. When the stock price rises too fast or the skewness becomes smaller, the risk will appear.

Extended data:

Conditions for an individual investor to apply to a securities company for opening an option account:

1. The market value of the securities entrusted by the option management institution and the available balance of the fund account (excluding the securities and funds integrated through margin financing and securities lending) when applying for account opening, with a total of not less than RMB 500,000;

2. Having been trading in a securities company for more than 6 months and having the qualification experience of participating in margin trading or financial futures trading; Or have opened an account with a futures company for more than 6 months and have experience in financial futures trading;

3. Have the basic knowledge of options and pass the relevant tests recognized by this Exchange;

4. Experience in simulated trading of options recognized by this Exchange;

5. Have corresponding risk tolerance.

Baidu Encyclopedia-Options