Learning To Invest

Call Purchase: Long Call (S=50)

Long Call

             Risk: Limited-downside
             Profit Potential: Unlimited-upside
             Equivalent Positions: Protected stock purchase-long stock/put
             Follow-up Action: None


Covered Call Write: Long Stock / Short Call (S=50)
Covered Call Write

             Risk: Unlimited-downside
             Profit Potential: Limited-upside
             Equivalent Positions: Naked put
             Follow-up Action: Rolling up and down the short call


Synthetic Long Stock: Long Call (S=50), Short Put (S=50)
Synthetic Long Stock

             Risk: Unlimited-downside
             Profit Potential: Unlimited-upside
             Equivalent Positions: Long stock
             Follow-up Action: None