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In STOCKS, FUTURES, OPTIONS and 4X Stocks have been the preferred vehicle of wealth building for many people. Stocks, also include futures, options and the very lucrative 4X market. With the proper tools, techniques and training you could very well be on your way to achieving your 1$T Million in stocks.
This Week's Topic: Options Explained: Hey Millionaire,
When deciding on a stock trading strategy a lot of people overlook options because it seems like so much of mystery. The stock option is easy to learn but like anything it may take a while to master. Options allow you to capitalize and create huge gains with little risk. Now even though this is the stocks page I want to tell you options are not new and not exclusive to stocks. An option can be used on almost any investment that will grow or decline in value. It is a great entrance strategy once learned, and a good way to hedge against any speculated investment (an investment that may either grow or decline in value) you may hold. This should be an eye opener if you are unfamiliar and a refresher if you are.
Hope you use the info and I will see you at Your 1$T Million. Amar
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Free, Unlimited Income Opportunity Online Make Money with Credit Repair and Financial Services | Articles: Fundamentals of the Options and Futures Markets
By Mika Hamilton Options and Futures are forms of derivatives that investors buy and sell around the world. There are many different terms to become familiar with regarding these investment strategies before you begin using them as part of your investment strategy.
Basic Terms:
Call Options- these give the owner the right to buy a stock at a specified price, within a specified amount of time. Investors who buy call options are hoping that the stock value increases before the option expiration date.
Put Options- these give the owner the right to sell a stock at a specified price, within a specified amount of time. Investors who buy put options are hoping that the stock value decreases before the option expiration date.
Strike Price- the price that the option can be bought or sold at.
Stock Option- a stock option gives the contract owner the right, not the obligation, to buy or sell a specific security, at a specified price, within a specified time period
Futures Option- a futures option gives the contract owner the obligation to purchase or sell a security at a specified price at a specified date in the future
There are 4 types of investors in the options market:
Buyers of call options
Sellers of call options
Buyers of put options
Sellers of put options
Investors who buy options are called 'holders' and investors who sell options are called 'writers'. There is an important difference between the two stock option investors. Investors who buy puts and calls have the choice to exercise their option contracts. Investors who sell puts or calls have the obligation to exercise their options contracts.
The price of a stock option must go above the strike price for investors to exercise and make a profit on call options and the price must go below the strike price for investors to make a profit on put options. When options fall into these ranges, they are called "in the money".
Futures options are contracts creating the obligation for an investor to buy or sell an underlying instrument, at a certain date in the future, and at a specified price. The future date in the contract is called the delivery date and the futures prices is the pre-set price. Futures options are obligations to buy or sell the underlying instrument. Unlike traditional stock options, investors MUST buy the underlying instrument at the contract expiration date. The Futures seller delivers the commodity to the buyer, or if it is a future settled as cash, the cash is transferred to the party making a profit. Futures contracts specify the underlying asset, the type of settlement (cash or physical), the amount of units, the type of currency, the grade of delivery and the delivery month.
When an investor is seeking to trade futures options, they are either selling options as puts or buying options as calls. If the investor believes that the commodity values will decline, they buy put futures, and if the investor believes that the value of the commodity will increase, they buy call futures. For both methods, the futures contracts are bought and sold at the strike prices.
Investing in stock options and futures is an important strategy to building personal wealth within the stock market. It is important to understand the basics of each before adding these strategies to your investment portfolio.
To learn about investing in stock options visit: http://www.optiontradersjournal.com
Stock Option Trading
By Eddie Tobey Stock option trading can be considered as one of the most financially rewarding strategies one can become involved in. Sometimes, this becomes a destructive investment plan, though. Stock option is the ‘right’ to purchase a stock at a given price within a specified time. Stock option trading is largely dependent on certain factors, such as name of the associated stock, strike price, expiration date, and the premium paid for the option, plus the stock broker’s commission.
Stock option trading involves trading standardized options contracts, which are listed by a variety of futures and options exchanges. In the United States, there are presently six exchanges where stock options are traded, including four open-outcry marketplaces and two electronic marketplaces. The open-outcry marketplaces are Philadelphia Stock Exchange (PHLX), American Stock Exchange (AMEX) in New York City, the Pacific Exchange (PCX) in San Francisco, and the Chicago Board Options Exchange (CBOE). The International Securities Exchange (ISE) and Boston Options Exchange (BOX) are included in the electronic marketplaces. In Europe, the main futures and options exchanges are Euronext.liffe and Eurex.
Another option to trade a stock is the ‘over-the-counter’ (OTC) trading, which is the opposite of exchange trading occurring in option exchanges or futures exchanges. The OTCs are traded not in exchanges, but between two independent groups; hence these transfers are the bi-lateral contracts. In this contract, at least one group is typically a large financial organization with a balance sheet big enough to guarantee such a contract. OTCs are administrated by an International Swaps and Derivatives Association agreement.
Stock option trading, with no intent to ever exercise the option, may be considered as a form of ‘leverage’. The 'grant' price (the price of an option) on a security might increase over the price of the security itself. For this reason, the entire value of trading in options has at times exceeded the total value of trading in stocks themselves.
Stock Options provides detailed information on Stock Options, Stock Option Trading, Employee Stock Options, Stock Option Software and more. Stock Options is affiliated with Stock Broker Career.
Stock Options
By Eddie Tobey A stock option is defined as a right to buy or sell a stock at a stated price within a specified time. Buyers of stock options are called holders and those who sell options are writers. "Call" suggests an option contract giving the owner the right but not the obligation to buy a specified amount of an underlying security at a specified price within a specified time. "Put" refers to an option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.
A stock option contract's value or premium is decided by five factors: the price of the stock, the strike price, the expiration date, the cumulative cost required to hold a position in the stock (including interest plus dividends), and the estimate of the future volatility of the stock price. The price at which an underlying stock can be purchased or sold is called the strike price. A stock price must go above (for calls) or go below (for puts) the strike price, before a position can be exercised for a profit.
Stock options are a flexible way for companies to share ownership with employees, to reward employees, and attract and retain a motivated staff. Stock option plans, often referred to as Employee Stock Options (ESOs), are used both in privately and publicly held companies. ESOs may be Incentive Stock Options (ISOs) that are qualified options or statutory options, and Nonqualified Stock Options (NSOs).
To trade a stock option, the most common way used is trading standardized options contracts listed by various futures and options exchanges. The major stock exchanges in the United States include Philadelphia Stock Exchange (PHLX), American Stock Exchange (AMEX) in New York City, and Pacific Exchange (PCX) in San Francisco.
Stock Options provides detailed information on Stock Options, Stock Option Trading, Employee Stock Options, Stock Option Software and more. Stock Options is affiliated with Stock Broker Career.
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