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OPTIONS

  • 23 July at 07:06 - by karldaniel.f - 792 views

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I do not fully get the concept..could you tell me if it is risky? Actually, what are exactly?

6 Answers

These fellas are contracts that give you the right (NOT the obligation), to buy or sell a security. Long story short, you purchase the option to buy (or sell) the security.

Let’s say that if you buy an option, your downside potential is the premium that you spent on the option. If you sell a call there is unlimited downside potential; if you sell a put, the downside potential is limited to the value of the stock.

24 July at 17:35 - by kenneth12

So, are options risky move? If you do your homework, it is no riskier than trading stocks and bonds. In fact, if done the right way, it can be even more lucrative than trading those

But it all comes down to whether or not you did your research. If the research points to the stock increasing in price soon, then you can buy a call. If research points to a stock decreasing in price, you can buy a put. If the research points to the option staying about the same, you can sell a call or a put.

24 July at 18:00 - by Kath-Middleton

The bottom line is..You have a lot of options with options ;) hahaha

26 July at 12:46 - by kenneth12

Options are just tools, and they're only as good as the people using them. If you are a well-educated investor, you could greatly enhance a portfolio's returns. However, a non-healthy use of options, can badly damage your holdings. To use options well, you've got to have a good understanding of the value of the business involved.

27 July at 00:24 - by TJSHall

The good thing about options is that you can participate in a stock's price movement without actually holding the shares, at a fraction of the cost of ownership, and the leverage involved offers the potential for sizeable gains. An option's value, and your profit potential, will be impacted by how much the stock price moves, how long it takes and the stock's volatility.

27 July at 05:41 - by JD49

Alright this was very helpful..cheers!

28 July at 11:17 - by  karldaniel.f
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