types of stock market

SECONDARY MARKET

When people talk about the stock market, they usually refer to the secondary market. It is formally defined as the venue where investors can trade previously issued securities minus the involvement of the issuing companies. In the secondary market, investors buy shares from other investors. This is what we commonly Read more…

HEDGING

One of the effective ways of trading options: Hedging is when you sense that there might be something that’d go wrong. It doesn’t mean that something will definitely go bad, it is just a way of protecting yourself (means your money by that) if things start to go bad. This is Read more…

SPECULATION

Next is Speculation. But it is quite risky. There are 3 ways every investor makes profit – when the price goes up, when the price goes down, and when the price moves sideways (meaning, the price stays still or goes up and down within a range). A lot of money Read more…

STOCK OPTIONS

You should always remember that an option is just a contract. The options holder has the right to either buy or sell the underlying asset at a predetermined price before the contract ends. Most of the time, a stock is chosen as the underlying asset of an option. But there Read more…

OPTIONS EXAMPLE TRADING

Consider that an investor has purchased 100 shares of a particular company stock at $100 each which ended up costing him $10,000. Besides just the stock, he also has five $200 premium call options each with a $100/share strike price, which will allow him the right to purchase 500 shares Read more…

OPTIONS VS STOCKS

Time Frame A regular stock has no expiration date. What this means, is that the stockholder can hold on to his stocks indefinitely. On the other hand, stock options have a set expiration date. And an option only becomes worthless when it is not being exercised before its expiration date. Read more…