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What we want to do is sell one out-of-the-money call option within a specific strike price and collect the premium. This is our instant cash profits. Then at the same time we acquire one out-of-the-money call option at a strike price higher approach one we just sold. This will be our insurance package.
Another benefit is your risk's clearly defined. Consequently you can't lose additional you expend. No matter what happens with trading stocks or that you option - you can never, ever lose far more you use.
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