Put Options: What They Are and How They Function
Put options help to insure your stocks, providing unlimited potential for profits while the most you would be able to lose is the premium paid.
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In options trading, there are both put and call options.
A call option gives the buyer the right to buy 100 shares at a fixed price (strike price) before a specified date (expiration date). Likewise, the seller (writer) of a call option is obligated to sell the stock at the strike price if the option is exercised.
A put option gives the buyer the right to sell 100 shares at a fixed price (strike price) before a specified date (expiration date). Likewise, the seller (writer) of a put option is obligated to purchase the stock at the strike price if exercised.
Put options help to insure your stocks, providing unlimited potential for profits while the most you would be able to lose is the premium paid.
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When I’m looking to buy a stock or put on an option trade, I don’t look for a company like J.C. Penney.
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It’s the last week of August, which means a few things. Volume in the market is drying up as most investors enjoy the last couple of weeks of summer.
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We don’t spend much time thinking about the news. Instead, we look at the market itself.
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You may already know Twitter (TWTR) the stock—it had its IPO late last year and is trading at 58.
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With stock markets staging a county fair Destruction Derby on Thursday and Friday, I want to dedicate this issue in favor of a piece on risk.
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There is an alternative way to generate income that is available to equity investors through option writing.
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In essence, we discount uncertainty, and handicapping that discount has become an extremely complex task.
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Cabot Options Trader Editor looks at the long-term market average and gives his forecast of the market direction for the next year.
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Options are derivatives of stock and their prices are very strongly related to the amount of volatility in their underlying stocks.
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