Many people who do not know the options trading. Though trading is very popular with those who are trading stocks. Then what is the difference with the stock or foreign exchange? To know that we will discuss in the following review.
Options trading, or in Indonesia called the Stock Option, actually is our right to sell (put option) or buy stock at a certain price (call option). So if we buy the option, it does not mean we buy its stock, but we are only buying the right to buy and sell shares at a specified price.
Option must specify the exercise price (the price of a deal to sell / buy shares Regardless market condition), the validity period of the option, the nature of the option (if option option buy or sell), and stock agreement.
Because of its expiry date has the option trading has a time value of money, it means getting closer to the expiry date he is getting cheaper. Options are contracts that give the official right (but not the obligation) to buy or sell an asset at a specified price and within a specified period.
How many types of open positions in options?
Options there are two types of Call Options and Put Options. Official Call Options are contracts that give the right to buy an asset at a specified price and within a specified period (when the currency is buy). Being put option is a contract that gives official right to sell an asset at a specified price and within a specified period (in the forex is a sell).
What is the difference with stock options?
Options are derivatives / derivative of stock and have an expiration date, while the stock of assets and there is no expiration date. Options allow investors to make profits from various directions stock movements: bullish, bearish or sideways. Options have 2 main functions: as Insurance, and as Leverage.
Need Investment Options?
Options are the most flexible investment vehicle that allows an investor to control a stock in large enough quantities, but at a cost that is much smaller than the share price.
Options can be used as a means of hedging and hedge. Imagine the fun had the option of insurance in force as the price of our stocks we have, by having a put option, regardless of the price fall in the stock market there are people willing to buy our shares at the agreed price. But unfortunately many are taking for means of speculation.