Aug 27
what does it mean if options price + strike is less than stock price?
Posted on Friday, August 27, 2010 in Investing
dnystwn asked:
.GQRFG call option is trading for $29 with strike price $35. The underlying stock for that option (HAR) is trading for $64.30 today.
.GQRFG call option is trading for $29 with strike price $35. The underlying stock for that option (HAR) is trading for $64.30 today.
Doesn’t this mean the option writer is losing money by selling the contract (strike price + option price is $.30 less than the stock price)?
Barbara
Jul 13
unclear about initial and minimum margin in options trading?
Posted on Tuesday, July 13, 2010 in Investing
tiruvenganna r asked:
hi,
i m from india
can anyone tell me – the difference between mimimum and initial margin – in options trading.
hi,
i m from india
can anyone tell me – the difference between mimimum and initial margin – in options trading.
also , can i sell my futures contract before the expiry date ?
i think indian traders better know the difference between america and euro stock exchanges.
Robert
Jun 26
question about stock options?
Posted on Saturday, June 26, 2010 in Investing
jailbreak asked:
I buy a put option contract with a strike price of $15 and an expiration at March 21st. The stock is trading at $18 when i buy it. Today, on February 19th, the stock goes to $13. Assuming the stock stays at $13 for the next month, will the put option be worth more today (Februrary 19th) or a month from now (March 19th)?
Brent
I buy a put option contract with a strike price of $15 and an expiration at March 21st. The stock is trading at $18 when i buy it. Today, on February 19th, the stock goes to $13. Assuming the stock stays at $13 for the next month, will the put option be worth more today (Februrary 19th) or a month from now (March 19th)?
Brent
Apr 18
Does options trading affect a company’s business?
Posted on Sunday, April 18, 2010 in Investing
no_nick asked:
I trade options and was wondering if by trading them I can harm or help companies like when we buy or sell their stocks.
Herman
I trade options and was wondering if by trading them I can harm or help companies like when we buy or sell their stocks.
Herman
Dec 16
Does anyone know of a fantasy stock game / simulator that is free and lets you trade options?
Posted on Wednesday, December 16, 2009 in Investing
Cory Norris asked:
I use investopedia but you can’t sell to open options. I would like a means of practicing writing covered calls for free.
Thanks in advance!
Ron
I use investopedia but you can’t sell to open options. I would like a means of practicing writing covered calls for free.
Thanks in advance!
Ron
Nov 4
How can I trade options on foreign stocks?
Posted on Wednesday, November 4, 2009 in Investing
Robert asked:
I want to trade options on a stock that is listed on the London stock exchange. Ameritrade and E-Trade don’t offer such a service. Do I have to open an account with a brokerage based in a foreign country or what? If so, can you recommend such a brokerage? Thanks.
Gene
I want to trade options on a stock that is listed on the London stock exchange. Ameritrade and E-Trade don’t offer such a service. Do I have to open an account with a brokerage based in a foreign country or what? If so, can you recommend such a brokerage? Thanks.
Gene
Sep 27
Tradng stock options?
Posted on Sunday, September 27, 2009 in Investing
stockkeeper939 asked:
If I want to buy long calls on stock, which type of call should I buy if the most I want to gamble is just the price of my contract? It should be noted that I will trade the options and never have the underlying stock. I wont have the funds to write covered calls, so just trading in hopes the option premiums increase. Also how do I avoid not being “called” on the option and have to provide the underlying stock.
If I want to buy long calls on stock, which type of call should I buy if the most I want to gamble is just the price of my contract? It should be noted that I will trade the options and never have the underlying stock. I wont have the funds to write covered calls, so just trading in hopes the option premiums increase. Also how do I avoid not being “called” on the option and have to provide the underlying stock.
These are just research questions and I dont plan on tradng options quit yet. Thanks.
Megan
Aug 24
Trading stocks,futures, and options for a living?
Posted on Monday, August 24, 2009 in Investing
TheStreetTrader asked:
Well I am in high school and love to trade. I am not a good student so i know im not going to be a doctor,lawyer and that stuff. I am a junior and have been investing/trading futures stocks and options for over 3 years now with great results. I don’t think its luck because i do use a strategy and a good one i kind of created from all the other pundits strategies and just experience. I am a discretionary trader. So i decided that i want to do this at home being self employed for a living. My questions are how many other people make a career doing this? Are they successful (millionaires)? My guidance and I talked about it and she even agreed a lot of trader drop out of HS or college and make millions! I have read a ton of books and i KNOW my strategy works in bull and bear markets last year year before that i made money and even this read after taking a 20% draw down i came back with my high for the year! I can control my emotions which is important in this business from what i hear. I have instinct i can just Sense when a stocks going to move and even if im wrong i cut my losses! I use stop limit orders, trailing stops and limit orders to execute my trades. So is this a smart decision? to pursue a dream life of trading??? Me i just want a nice mansion in NJ nice cars cloths etc. and a lot of traveling around the world.
ok i read security analysis and the intelligent investors and i must say graham is too old school those methods just dont work anymore dude… trading makes money daytrading makes even more quick cash. bottom line i know how to invest but investing is pointless unless you have over 50 million to invest it willl take you forever to get 50 Mil investing like graham and buffet just isnt in my interest..
thanks but you know its interesting because i did this personalilty test in career ed in high school and the thing i got got me really happy yet weird approx. only 1% of the american population scored it its perfectionist.. it also said most likly to become a millionaire and a good career would be analyst or trader sooo yeah the fact that ive been wanting to do this for many years and just last year i took this test and got that motivated me and this year is by far my best year! i come from a very poor country and stuff soo that i have this chance i have to take it ya know? and im used to living with little money which always helps ! i am also well aware that some traders lose maybe 80% in just weeks or months but they make it back its the traders who stick with it who make the big bucks in the long run… however even during this crash i only lost 20% despite being fully invested because i use trailing stops or stop loss orders… to help prevent from losing profits … i can make it
ya know the funny thing everyday that i skip school to trade stocks i make a lot of money! a lot more than i would being in school hahaha sure im missing earth science and language arts and math but im making more money than some students do their entire year working part time hahahaha
and i usually read 2 or 3 books a month.. on investing or trading im learning both things because i know once you reach a certain level you cant just trade all the time you have to invest..
Francis
Well I am in high school and love to trade. I am not a good student so i know im not going to be a doctor,lawyer and that stuff. I am a junior and have been investing/trading futures stocks and options for over 3 years now with great results. I don’t think its luck because i do use a strategy and a good one i kind of created from all the other pundits strategies and just experience. I am a discretionary trader. So i decided that i want to do this at home being self employed for a living. My questions are how many other people make a career doing this? Are they successful (millionaires)? My guidance and I talked about it and she even agreed a lot of trader drop out of HS or college and make millions! I have read a ton of books and i KNOW my strategy works in bull and bear markets last year year before that i made money and even this read after taking a 20% draw down i came back with my high for the year! I can control my emotions which is important in this business from what i hear. I have instinct i can just Sense when a stocks going to move and even if im wrong i cut my losses! I use stop limit orders, trailing stops and limit orders to execute my trades. So is this a smart decision? to pursue a dream life of trading??? Me i just want a nice mansion in NJ nice cars cloths etc. and a lot of traveling around the world.
ok i read security analysis and the intelligent investors and i must say graham is too old school those methods just dont work anymore dude… trading makes money daytrading makes even more quick cash. bottom line i know how to invest but investing is pointless unless you have over 50 million to invest it willl take you forever to get 50 Mil investing like graham and buffet just isnt in my interest..
thanks but you know its interesting because i did this personalilty test in career ed in high school and the thing i got got me really happy yet weird approx. only 1% of the american population scored it its perfectionist.. it also said most likly to become a millionaire and a good career would be analyst or trader sooo yeah the fact that ive been wanting to do this for many years and just last year i took this test and got that motivated me and this year is by far my best year! i come from a very poor country and stuff soo that i have this chance i have to take it ya know? and im used to living with little money which always helps ! i am also well aware that some traders lose maybe 80% in just weeks or months but they make it back its the traders who stick with it who make the big bucks in the long run… however even during this crash i only lost 20% despite being fully invested because i use trailing stops or stop loss orders… to help prevent from losing profits … i can make it
ya know the funny thing everyday that i skip school to trade stocks i make a lot of money! a lot more than i would being in school hahaha sure im missing earth science and language arts and math but im making more money than some students do their entire year working part time hahahaha
and i usually read 2 or 3 books a month.. on investing or trading im learning both things because i know once you reach a certain level you cant just trade all the time you have to invest..
Francis
Aug 24
After a corp. action, an option’s number of shares or its multiplier may be changed. What is the significance?
Posted on Monday, August 24, 2009 in Investing
ronnotel asked:
The option is adjusted to ensure fairness to both parties to the trade. If a stock splits 2 for 1, then it’s only fair that the original option contract settles into 200 of the new shares instead of 100 of the old. Very often, the multiplier (usually 100) is also adjusted. When multiplied by the trade price, the multiplier determines how much actual cash changes hands during a trade. E.g., if an option is trading at $1.10, and the multiplier is 150, then I would have to pay $165.00 to buy one option contract. I would appreciate a worked example demonstrating how and why the multiplier is important when adjusting an option in response to a corporate action such as a stock split, a stock dividend, a spin-off, etc.
Esther
The option is adjusted to ensure fairness to both parties to the trade. If a stock splits 2 for 1, then it’s only fair that the original option contract settles into 200 of the new shares instead of 100 of the old. Very often, the multiplier (usually 100) is also adjusted. When multiplied by the trade price, the multiplier determines how much actual cash changes hands during a trade. E.g., if an option is trading at $1.10, and the multiplier is 150, then I would have to pay $165.00 to buy one option contract. I would appreciate a worked example demonstrating how and why the multiplier is important when adjusting an option in response to a corporate action such as a stock split, a stock dividend, a spin-off, etc.
Esther
Jun 14
What is the maximum you would be willing to pay for this put option?
Posted on Sunday, June 14, 2009 in Investing
Johny asked:
You own a stock currently trading at $50. The annual volatility of the stock based on historical prices is 20%. Yesterday, the Fed issued a warning to small investors suggesting that the stock market’s volatility has doubled due to oil price uncertainty. The uncertainty is expected to last 6 months, after which normal times will resume. Concerned about the wealth of your investment, you decide to invest in a 6 month European put option with an exercise price of $45. Assume that the annual risk free rate is 5%.
Jacob
You own a stock currently trading at $50. The annual volatility of the stock based on historical prices is 20%. Yesterday, the Fed issued a warning to small investors suggesting that the stock market’s volatility has doubled due to oil price uncertainty. The uncertainty is expected to last 6 months, after which normal times will resume. Concerned about the wealth of your investment, you decide to invest in a 6 month European put option with an exercise price of $45. Assume that the annual risk free rate is 5%.
Jacob