Options trading investopedia video

Posted: aleksandr_s7 On: 14.06.2017

Options contracts grant the owner the right to buy or sell shares of a security in the future at a given price. Calls and puts are the most common options contracts.

options trading investopedia video

A call option gives the holder the right to buy a security in the future. The holder of a put option has the right to sell the security in the future. Neither obligates an owner to exercise their option. Instead of buying shares, she enters into an agreement with Sally, who owns the stock.

Mary agrees to buy shares in the future at an agreed upon price — the strike price. Mary pays Sally a premium for this right. Put options work in an opposite manner.

Options Contract - Video | Investopedia

The owner of a put option has the right to sell shares of stock in the future. If prices fall below the strike price, Mary can buy shares in the market at the current price and then profit by selling them to Sally at the strike price.

options trading investopedia video

With an options contract, a savvy investor has a good chance of making a profit. But there is also risk. If a stock decreases in value, a call option is worthless to its owner. A put option is worthless if the stock value increases. Dictionary Term Of The Day. A measure of what it costs an investment company to operate a mutual fund.

Latest Videos PeerStreet Offers New Way to Bet on Housing New to Buying Bitcoin? This Mistake Could Cost You Guides Stock Basics Economics Basics Options Basics Exam Prep Series 7 Exam CFA Level 1 Series 65 Exam.

The Options Premium - Video | Investopedia

Sophisticated content for financial advisors around investment strategies, industry trends, and advisor education. As long as the underlying stocks are of companies you are happy to own, put selling can be a lucrative strategy.

options trading investopedia video

Learn more about stock options, including some basic terminology and the source of profits. Learn the top three risks and how they can affect you on either side of an options trade.

Investopedia - Sharper Insight. Smarter Investing.

A look at trading options on debt instruments, like U. Treasury bonds and other government securities.

A bull call spread, also called a vertical spread, involves buying a call option at a specific strike price and simultaneously selling another call option at a higher strike price. An expense ratio is determined through an annual A hybrid of debt and equity financing that is typically used to finance the expansion of existing companies.

A period of time in which all factors of production and costs are variable.

What You Need to Know About Binary Options

In the long run, firms are able to adjust all A legal agreement created by the courts between two parties who did not have a previous obligation to each other. A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. A statistical technique used to measure and quantify the level of financial risk within a firm or investment portfolio over Content Library Articles Terms Videos Guides Slideshows FAQs Calculators Chart Advisor Stock Analysis Stock Simulator FXtrader Exam Prep Quizzer Net Worth Calculator.

Work With Investopedia About Us Advertise With Us Write For Us Contact Us Careers. Get Free Newsletters Newsletters. All Rights Reserved Terms Of Use Privacy Policy.

inserted by FC2 system