Lesson 6
Four recipes you can book
A strategy is just a sentence made of the pieces you already have. Here are four worth saying out loud.
Long call
Buy a call. You want ACME up by more than the premium, before expiry. Loss is the premium. This is the smallest directional ticket on the desk.
Long put
Buy a put. You want ACME down. Same shape as the long call, mirrored. Useful as a hedge or as a short-the-stock substitute that cannot lose more than the premium.
Protective put
Own the shares, buy a put. You kept the upside of the stock and bought a floor. The put is insurance. Insurance has a premium. That is the point, not a flaw.
Covered call
Own the shares, sell a call above the market. You collected rent. In exchange you sold the upside above that strike. Quiet tape: you keep the rent. Rally: you get called away in spirit (here, in cash).
The desk will book each of these as a one-click recipe, using the nearest listed strike and a 21-day expiry. After that, step the clock. Watch which number moved.