I was watching Casino Royale and M states in one of her conversations with Bond that the CIA analyzed the stock markett after 9/11 and someone made a fortune by buying airline stock and predicting it to crash. SO I want to know, can anyone buy these options, how much are they, and is there a way to see who bought them?
2006-12-27 18:23:30 · 4 answers · asked by drecarter04 2 in Business & Finance ➔ Investing
Basically there are 2 kinds of options, call & put. In a nut shell, calls are when u want the market to go up, and puts are when u want the market to go down.
Put options give the buyer the right to sell the underlying security at a specific price within a certain time frame
Buying a put option is similar to having a short position on a stock.
To answer your other questions:
Can anyone buy these options?
Yes, they can as long as they have a brokerage account or a broker that offers option trading.
How much are they?
The price will vary as an option is a derivative an the option price is calculated by a number of factors. Underlying stock price, liquidity, is it in, at or out of the money and intrasic value (time left on the option)
Is there a way to see who bought them?
Well you won't be able to see each any every purchase, but there are announcements when a major shareholder buys or sells a company's shares. Other then that you have to be more specific with your question.
If you want to find out more let me know....
2006-12-27 22:26:12 · answer #1 · answered by Anonymous · 2⤊ 0⤋
A Put option is a contract to sell certain number of shares of a company at a future date called the expiration date of the option at a specified price.
The buyer of the Put option pays a premium for buying this contract which usually is 100 shares for one contract and each option costs a premium, say $2 then then one contract will be for $200. In it's place if you bought the stock directly and if the stock costs $20 then you will have to pay $2000. So with 10% you can get the benifit of investing with higher amount. Here it is like shorting a stock. Of course margin is not considered in my explanation.
Put options are brought when one feels the market for stocks are going to go down.
2006-12-28 04:01:30 · answer #2 · answered by Mathew C 5 · 1⤊ 0⤋
Put option is an option or a right to sell a stock at a pre-specific fixed price. It's kinda like gambling, if you don't know anything about stock market. Say, the airline stock now sells for $10, you predict that the stock will go down due to 9/11. You buy a put option that allows you to sell in the future at $10. In the future, if the stock really drops, say to $8, then you can buy the stock at $8 then exercise the put option and sell it at $10. You pocket $2 profit (buy at $8 sell at $10). I can explain in more details but i don't think you want to hear them beyond what i just said. so, in simple words, if you don't know anything about stock market, don't buy put option because its VERY VERY RISKY.
2006-12-27 18:39:11 · answer #3 · answered by Emma 3 · 1⤊ 0⤋
Put option gives you the right to sell your shares for a certain price. The price of the option depends on time to maturity and the price of the underlying shares. As the share price drops, the put option becomes more valuable. It works just like insurance. You would appreciate insurance better when the value of the things you insured depreciate.
2006-12-28 00:08:57 · answer #4 · answered by Sang Suci 2 · 1⤊ 0⤋