my brothers making lots of mad money from options and i want to learn more about them, i dont care if u just give me a link to a websitte; any help wud be greatly appreciated
2006-08-07 17:18:06 · 19 answers · asked by Anonymous in Business & Finance ➔ Investing
In finance, an option is a contract whereby one party (the holder or buyer) has the right but not the obligation to exercise a feature of the contract (the option) on or before a future date (the exercise date or expiry). The other party (the writer or seller) has the obligation to honor the specified feature of the contract. Since the option gives the buyer a right and the seller an obligation, the buyer has received something of value. The amount the buyer pays the seller for the option is called the option premium.
Most often the term "option" refers to a type of derivative which gives the holder of the option the right but not the obligation to purchase (a "call option") or sell (a "put option") a specified amount of a security within a specified time span. (Specific features of options on securities differ by the type of the underlying instrument involved.)
2006-08-07 17:26:07 · answer #1 · answered by J 4 · 0⤊ 0⤋
An option is the right to buy or sell shares. Many people do not buy or sell the underlying shares only the options to do so. If the price of the underlying share changes in a favourable direction money can be made.
If you have an option to buy 1000 shares at $20per share, the cost of the option is minimal only usually a few cents per share, however if the share price rose to say $25, your share option is now worth money and if you sell the option you make a profit. The logic is that you could make $5000 from buying the shares and selling them immediately so the option could be sold for anything up to the $5000 assumed profit.
2006-08-07 17:29:29 · answer #2 · answered by StatIdiot 5 · 0⤊ 0⤋
An option is the ability to buy or sell a security at a specified price over a specific amount of time. Why is it called an option? Because the decision to actually buy or sell that security during that time is strictly up to the option's owner. If the owner decides to do it, then the option has been exercised, otherwise it simply expires unused.
Now I should point out that options trading is not for the inexperienced investor because you can loose BIG if you don't know what you're doing.
2006-08-08 06:25:00 · answer #3 · answered by msoexpert 6 · 0⤊ 0⤋
An option is the ability to buy at a stock at a future date. This ability to do so cost money and is calculated by a some what complicated formula created by two men named Black and Scholes, both of which went on to win the Nobel prize in economics for the formula.
2006-08-07 17:27:41 · answer #4 · answered by 1 1 · 0⤊ 0⤋
People who are making lots of "mad" money with options are either very lucky or liars. A select few that are very experienced, have good instincts and guts (and the ability to take a loss or profit and move on) will make money - but most are gamblers and will lose it all eventually. Just hang in there it will happen.
2006-08-07 17:23:42 · answer #5 · answered by jaybird 4 · 0⤊ 0⤋
It's the right to buy or sell a stock at a later date at the option price (or strike price).
The big controversy right now with executive pay is over backdates stock options.
These are options given to corporate employees to buy a stock at the price it was a certain time ago.
The problem is they timed the option for exactly when the price was the cheapest and it allows them to sell at the current higher price....thus maximizing the gain to be made.
Most companies have not been accounting for the options in the proper manner and are getting in trouble for it.
2006-08-07 17:23:04 · answer #6 · answered by markmywordz 5 · 0⤊ 0⤋
Options Trading
Learn about options, flexible investments that can fit many financial goals. ... Brokerage Handbook. Basket Trading. Margin Trading. Options Trading. Conditional Trading ... To trade options at Fidelity, you must apply for options trading (log in required) and be ...
personal.fidelity.com/products/stocksbonds/content/options.shtml
2006-08-07 17:23:23 · answer #7 · answered by niceguy 2 · 0⤊ 0⤋
Options are a form of stock trading. You can make money from it when the market is up or down, but I have not tried it my self. Just seen this infomercial. Optionetics.
2006-08-07 17:23:21 · answer #8 · answered by AK 2 · 0⤊ 0⤋
Options are conditions attached to certain stock that may help you according to varying situations in the market. Read about options here:
http://www.investopedia.com/university/options/
2006-08-07 17:21:37 · answer #9 · answered by truthyness 7 · 0⤊ 0⤋
Try to get another option for you from your brother itself
2006-08-07 17:26:01 · answer #10 · answered by Anonymous · 0⤊ 0⤋