A bullish strategy is employed when a trader believes that the price of a specific asset will follow an upward trend and gain value.
Trading Example :
It is now it 12:00 PM and the market has just had a significant sell off. You have been following Gold today and think that within the next few minutes the price of Gold will go above it’s current price of 1120, and follow a bullish trend.
It is now it 12:00 PM and the market has just had a significant sell off. You have been following Gold today and think that within the next few minutes the price of Gold will go above it’s current price of 1120, and follow a bullish trend.
You go and view which options are open and decide to buy a Call contract that expires in 30 minutes with an initial investment of $1,000. If you are correct, and the price of Gold rises in 30 minutes, you will be in-the-money and realize a profit of $750 ($750 profit = $1,750 less $1,000 of the investment).
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