Options Questions?

Question

Hi, i have not been able to find any good and thorough information on options. I was wondering if someone could tell me what Open interest is, how the whole option cycle thing works, what the net on the option quote means, and this is unrelated to options, but what is mark-to-market accounting
? like i'm getting millions of different definitions of it an it doesn't make sense because they said that Enron did this.

Answer 1

You can get good information about options at

http://www.cboe.com/LearnCenter/default.aspx

but to get complete information about option you should read at least one good book about options. Two books I recommend you consider are "Options as a Strategic Investment" by Lawrence McMillon and "Options Volatility & Pricing" by Sheldon Natenberg.

Open Interest is the number of contracts in existance. Open interest increases if an option is traded and both the buyer and the seller are opening new positions. Open interest decreases if an option is traded and both the buyer and sell are closing an existing position, or if an option is exercised.

The option cycles are shown at

http://www.cboe.com/TradTool/strikepricecode.aspx

Mark-to-market accounting, from an individual's tax perspective, is explained here:

http://www.fairmark.com/traders/mtmacc.htm

Answer 2

www.stockpickguide.com