Public currently offers Long Calls and Long Puts, with Covered Calls and Cash-Secured Puts coming very soon. Public will then continue by adding on multi-leg strategies, including straddles, strangles, collars, spreads, butterflies, and condors.
A long call gives an investor the right to buy shares of a stock or ETF at a specific strike price before the contract’s expiration date. Long calls are typically used when the investor anticipates the stock's price will rise, allowing them to profit from potential price increases.
A long put gives investors the right to sell underlying shares of a stock or ETF at a specified strike price before the contract’s expiration date. Long puts are typically used by investors who expect an asset’s price to decline, signaling a bearish outlook on the stock's future.
A protective put is similar to a long put, but the investor also owns the underlying equity. In these scenarios, investors are typically looking to protect against a significant stock price decline, and limit their potential losses.
A covered call is when an investor is short a call, but owns the underlying equity. In exchange for giving someone else the right to buy the stock you own at a specific strike price within a set time frame, you receive a premium. It is a strategy many investors use to earn additional income from their stock positions while limiting their risk. Covered calls are often used by investors who plan to hold the underlying equity for a long time but do not expect a substantial price increase during the duration of the call option.
A cash-secured put is when an investor is short (or the writer of) a put, but has set aside the necessary cash as collateral to purchase shares of the underlying equity in case the put were to be assigned. Cash-secured puts are typically used when investors want to make a neutral to slightly negative bet on the price of the security.
Public does not currently permit strategies involving unlimited risk, such as naked puts and naked calls. Learn more about Option levels in our FAQs, or about various option strategies in Public’s Options Education Hub.
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