Basic Options Strategies: Rapid Fire

What this video covers

• Why buying an option is a full hedge with defined loss, while selling an option is only a partial hedge equal to the premium received
• Why the protective put is the only basic full hedge for long stock, and why selling a call never provides full protection
• How a covered put creates unlimited loss while a covered call has only a large but limited loss
• The break-even formulas: calls always add (strike plus premium), puts always subtract (strike minus premium), and why both sides of one contract share the same break-even
• How to hedge foreign currency exposure using the receive-equals-puts, pay-equals-calls rule, including the standard 10,000-unit contract size
• Why yield-based options reverse normal logic: long bonds hedged against rising rates require buying yield-based calls, not puts
• The settlement distinctions between cash-settled European-style index options and physically settled American-style equity and currency options, plus early assignment risk near ex-dividend dates