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…