An introduction to trading options
Options generally give a person the right but not the obligation to buy or sell whatever the contract was created for. For example, an option on a car gives you the chance to buy or sell that car for a specified price, but you don’t have to do so if you don’t want to buy it. Option price In exchange for this privilege to buy or sell an asset at a specified price whenever you want before it expires, there is a price to pay. This price is the option price. As we know, anything that has value or price can and will be traded if there is profit to be made. When it comes to the stock market, there are two types of options: Call options and put options. Call options give the owner the right to BUY the underlying stock at a certain price on a certain date; and put options give the owner the right to SELL the underlying stock at a certain price on a certain date. Read on below to familiarize yourself with some concepts that will get you started in trading options. Direction of stock price Most people would guess that stock prices can only move in two directions, but stock prices can move in three directions: – They can move up – They can go down – They can stay the same The difference between a call option and a put option A call option gives you the right to buy a security at a certain price on a certain date; and a “put option” gives you the right to sell a security at a certain price on a certain date. You can remember this difference by remembering that a ‘call option’ gives you the right to buy the stock away from someone else and a ‘put option’ gives you the right to sell the stock to someone.
Important terms
“The ‘strike price’ is the price at which someone has the right to buy a call option or the right to sell a put option. ” The ‘expiration month’ is the month in which the option (or the right to buy/sell) expires (this is usually the third Friday of each month).
About the Vikingen
With Vikingen’s signals, you have a good chance of finding the winners and selling in time. There are many securities. With Vikingen’s autopilots or tables, you can sort out the most interesting ETFs, stocks, options, warrants, funds, and so on. Vikingen is one of Sweden’s oldest equity research programs.
Click here to see what Vikingen offers: Detailed comparison – Stock market program for those who want to get even richer (vikingen.se)
