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Sunday, August 22, 2010

Options Trading

Guys, found a site which is related with the options trading.There are two types of options in the business of stock option trading: the call option and the put option. When you buy a call option, you are betting that the stock price will increase in the near future. The distinct difference between options and stocks is that stocks grants you ownership of a small portion of the company, on the other hand, options are only contracts that afford you the right to buy or sell the stock at a specified price and on a specified date. A put option is normally bought when an investor thinks the price of the stock will go down in the near future.options have expiration dates which adds to its risks but also increases the rewards. The expiration date has a big effect on the value of an option. The amount of time you have until your options expire will depend on what option you buy. This can be as soon as a couple of weeks to more than 2 or 3 years. The longer ones are called leap options.When buying options, you won’t be owning part of the company like you would with stocks. However, you will be able to control a larger amount of shares with less money. Just like buying and selling stocks, when dealing with options, there is always a buy and a seller. Because of this, call and put options can also be sold as well.

1 comments:

  1. Hello,
    Here is a great strategy, good for beginners as well as for advanced option traders(all explained with picture attached).
    Our scanners pulled out a high probability stock for a potential sharp move(relatively sharp move to the alleged stock).
    Establish equal delta of ATM Calls and Puts, long straddle 60 to 75 days to expiration.

    Advanced option traders: keep scalping Gamma because U R buying Vega, and as U see IV is in its lowest rates so Theta wont bite hard.

    New option traders: hold the strategy until a reasonable profit or if the strategy is approaching 40 days to expiration.
    My statistics pointing to a high probability low cost play.
    Full revue, pictures included
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