Im trying to learn more about OPTIONS TRADING, I need help with some terms in DETAIL please.?
815623
Just think of it like this - an opening transaction starts the position - long or short (a buy to open would be a long, a sell to open would be a short) and a closing transaction leaves you flat (buy to close = covering a short, sell to close = selling a long).  They ask this because shorting options can be extremly risky, and may brokers will not let you sell call options short.\nI don't know what quote software you're using, but the 45 and 55 sound like strike prices to me, you should look into that.\nWhen you buy one call option contract, you're buying the RIGHT to buy 100 shares of the stock at the predetermined price, not the obligation, and not the actual shares, but I'm probably splitting hairs here - yes, one contract is equivilant to 100 shares.\n\nOptions are bot and sold just like stock, you make money with them the same way you would trading stock - buy low and sell high (or visa versa).  One important distinction, long positions in options are intrinsically 'wasting assets' - they will lose value over time.\n\nThese are  more tricky and risky than plain equities, and it sounds like you need to do a little more research into them before you get started - don't start before you understand them completly.  I'm sure google would produce numerous sites that explain them and the different stratagies employed by options traders (spreads, straddles, covered calls etc.)\n\nGood luck to you!
461112
There are people that do make money trading options, but it is not for the faint hearted. You are paying a premium for the right to buy or sell the stock at a particular price within a certain amount of time. \n\nLuck is your most useful tool. If you get lucky and hit a stock during a major move, you will make a lot of money. If you hit a stock at the end of its move, you will loose the amount paid for the options. The more volatile the stock the higher the premium for the option. \n\nMany professionals use the Black-Scholes Pricing Formula for Call Options. Look it up on Yahoo to determine how it works. It is too complicated to go into here.\n\nPersonally I think the best way to make money on options is to write covered calls. That way you get the premium. Of course, if the stock makes a big move on you, some one else gets the benefit of that.
956391
I have a great trading pair for you.  Basically you pick 2 stocks that are very similar, but you think one is better than the other.  So you short the one you don't like (Sell-short) and go long on the one you do like.  I think wind energy is going to be a better investment than coal, so I want to go long on Florida Power and Light (FPL), because they are the nation's largest owner of wind farms.  I want to sell-short TXU, because they are planning on building up to 10 new coal-fired power plants.  \n\nNow, even if both stocks go down, as long as FPL goes down less than TXU, you will make money.\n\nIf you are looking for other strategies, and to see what the best traders are buying and selling, I would suggest http://www.top10traders.com - this is a free site that lets you create a portfolio of stocks with $100,000 in "play" money.  Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors.  You can also read posts on investing from the best traders, as well as share your own investing ideas.\n\nHere are this month's best traders:\n\nhttp://www.top10traders.com/Top10Standings.aspx\n\nGood luck!
43009
An option is a contract, If you buy a "call" you have the right to buy a stock at the strike price, and seller is obligated if you "exercise" which means telling the seller you are buying the shares. \nFor Example\nYou buy 1 contract (100 options) of Microsoft for $1 which will cost you $100 and lets say the strike price is at 25. Let's say Microsft is at 24 the option "real value" of the option is worthless because you won't want to  buy it at 25 from the seller if you can buy it from the market for 24. Now if the stock reaches lets say 50, You have the right to buy 100 shares of MSFT at 25, and then sell them immideatly at 50. The real value per share is $25 so you would get 2,500 dollars back.\n\nPut options is the exact same thing, except you have the right to sell at the strike price, so If MSFT is at 15 and you have a put at 25, you have the right to buy the stock at 15 and then sell it at 25. (this transaction does not actually happen like this, but this is what makes it easy to understand).\n\nBad news about options, they expire. They have a date, which they would be worthless the day after expiration.\n\nAlso, you have an option to write, selling options on stocks you own is a way to reduce risk and possibly make free cash and increase yields if you know what you are doing. (that is what I do.)
829524
Hi, i suggest a great site with plenty of Issues related to your Investing and everything around it. it also provide clear and accurate answer to many common questions.\n\nI am sure that you can get your answers in this website.\n\nhttp://investing.sitesled.com/\n\nGood Luck and Best Wishes!
1074237
Daytrading entirely depends on you. Can you buy the stocks low, and sell them high? There's nothing scammy about it, as long as you're making informed decisions and they pay off.
231682
I can train you.\n\nVery Important Note:\nIf you don't have assets of at least $2,500,000.00 and if you are not willing to lose at least $25,000.00 PER DAY I suggest you to stay way from energy futures.  \n\nFUTURES ARE RISKIER THAN OPTIONS
434707
Derivatives are contracts to sell or buy (or trade) some underlying asset, at some future point in time.\n\nFor example, let’s say Microsoft stock is selling on the market today at a price of $100 per share.  You and I enter into a contract in which I agree to buy 10 shares of Microsoft from you in two weeks.  We further agree that the price of that sale will be $100, no matter what the market price happens to be on that day.  Two weeks go by, and on the appointed day I transfer $1,000 dollars to you, in fulfillment of the contract, and you transfer 10 shares of Microsoft to me.\n\nIf the market price on that day is still $100 per share, then neither of us has profited or lost from the transaction.  But if the price has risen, say to $105 per share, I have come out ahead, because I have purchased shares worth $1,050 for a price of only $1,000.  I can turn around and immediately sell my shares on the market, thereby making a profit of $50 from our contract.  You, on the other hand, have suffered a $50 loss by selling your shares for $1,000 when they are really worth $1,050.\n\nHowever, if the price had dropped, say to $95 per share, I would still obligated to pay $1,000 for 10 shares.  Under this scenario, I would be buying shares that are only worth $950; therefore, I would take a $50 loss, and you would come out $50 ahead.\n\nAs you can see, derivatives contracts are essentially a form of gambling.  In the above example, I am betting that the price of Microsoft will rise over the intervening two weeks, and you are betting that it will fall.\n\nDerivatives are useful, primarily in hedging risk.  For example, say I am a farmer of green beans, and historically, green beans sell for about $10 a bushel, but this price varies widely depending on growing conditions in any particular year.  I might enter into a contract with a speculator to sell all my crop at a price of $9 per bushel.  In doing so, I guard against the possibility of a steep drop in the price that would wipe me out.  On the other side, the buyer accepts the risk of a drop below $9 per bushel, but will come out ahead if the price is greater than that, because he will turn around and sell my green beans at that greater price.
50554
Look at how much you invested and how much you've lost. Then, figure out how much you could "lose" before you HAD to get out. If the calls are still worth more than your exit point, you COULD keep going.\n\nWhile we're about 5 weeks away from the expiration of your options, time decay will start kickingin soon. Playing with options close to expiration is very risky.\n\nLearning point : When you invest in options, set two exit "points". The lower one will serve to limit your loss. The upper one will require some mental discipline and limit your profits.\n\nMany investors with a profitable stock/option want to let it ride. Unfortunately, even good stocks/options can quickly turn sour, costing you $$$. In the words of Jim Cramer...\n\nBulls make money.\nBears make money.\nPigs get slaughtered.\n\n\nGood luck!
891907
1st, I suggest you give up no more than 70% of your stock options.  Never 50%, I hate to see you have something ripped from under you do to a technicality in who has put more investment in the company based on collateral.  Talking with an appropriate attorney regarding finacial possibilities = + as well as drawing up a contract with those of whom you distribute your stock to so as to bar liability for losses as well as investing in your interest for gains.  Good LUCK!
1054185
Scottrade.com $7 per trade dude..   Optionsexpress is good as well when you get a set of balls... ... You do know it is highly likely u will lose money right...  Some of us do this for a living and still get smoked - so dont give up right away .
548887
The Optionetics course has a detailed series of manuals, audios and videos that comes with the course.  Often, people who attend the course, resell these materials on Ebay for a couple hundred dollars.  A very good way to find out if the course is worth the money is to buy a copy of the materials and study them extensively (resell them if you want to someone else who wants to do the same thing).\n\nRealistically, you won't be able to trade effectively without also buying a subscription to their software that helps you look for good trades.  They won't allow you to sign up unless you actually attend a seminar.
992891
You losses are always 100% in the case of options.\n\nIt's not like stocks where you can actually sell your shares when your losses are just 10%\n\nIf you cannot handle a 100% loss then you should stay away from options and move to safer investments like stocks, mutual funds, ETFs and Bonds.\n\nTop 3 Answerer in Business & Finance. (Vote for me)
170971
Learn About:\n\nStandard Deviation\nAsset Price Forecasting\n& Risk Mngt.\n\nIt will help you when you talk to professional money managers.
1121865
When you sell a call, you can't set a stop price.  But, you can pick one of the different striking price levels available for the call option trading on a specific stock.  What strike price level (more or less out of the money) you select depends on how you perceive the outlook for your stock.  And, what do you want to achieve.  \n\nIf you feel that the stock has a moderate or low valuation, you view the downside risk as low and the upside potential as fairly high.  In such a case, you could sell a call with an exercise price way out of the money just to increase your yield on the stock by receiving the premium on this call.  This also depends on the volatility of this stock.  If it is really not that volatile, you may want to set the exercise price not so far out of the money, so you earn real money on the premium.  \n\nIf you think the stock is expensive right now, you may want to select the exercise price close to being in the money.  By doing so, you will receive a fat premium that will cushion your downside risk.  \n\nIf you need any clarification, contact me through "Answer" and I'll revise my response accordingly.
652060
I think you are refering to option pricing models.\nYou want to search online for real option theory that lets you build models for build-vs-buy decisions. I have attached a link for starters, you can also look in Wikipedia for Black-Scholes option pricing model to get an introduction to it.
910738
With all due respect - and it's wonderful to see someone so young who is managing so well - but I think you might be just a little bit mixed-up here.\n\nThe option, in this case a call, will have a B/A (bid/ask) spread.\n\nIf you were to enter an order to buy it, you could specify a price (a limit order) that would be less than the asked price, or you could enter a market order that might get filled at the ask price you see on your quote screen, or it might get filled at a higher price.  \n\nWhen trading options, I absolutely never, never enter market orders.  Why not?  "It's a license to steal."  There's nothing to prevent the MM from jacking the ask when he sees your order.\n\nHow to choose the limit price that will 1) be less than the ask and 2) will actually work so you can get the job done?  This is a bit of an art.  Get detailed quotes for everything, GOOG itself and options with strikes close to the one you're interested in.  Examine the sizing.  How many bidding, how many offering?  Is GOOG trending down this minute?  This day?\n\nWith respect to the option you're interested in, if there are 399 contracts bid and only 7 offered, and GOOG is trending up, you'll have to set your limit order closer to the ask to get the job done.  If the situation is reversed, you can come down in your limit price, closer to the bid - but why would you be buying at just that minute anyhow.\n\nLastly, don't want to rain on your parade, but please keep in mind that countless studies have shown that it's the buyers of naked options who are the ones that lose money.  It's the option sellers who make money, because they are selling time value.\n\nYour broker probably won't allow you to sell naked options.  You could do a spread combination, going long one option and short another option.  For example, in a calendar spread one would buy a call farther out in time and sell a near-term call which would be covered.  If the near-term expires out-of-the-money one then sells another near-term, and so on until one catches up with the long-term position.\n\nThere are countless variations and all this requires quite a lot of study first.  CBOE has a virtual option trading model, so you could play with virtual trading while you get the hang of things.\n\nWishing you great success.