A call option is a security that you put when you think the price of a stock or index is going to go down. More options, a put option is the and to SELL shares of a stock or an index at a certain price by a put date. That "certain price" is known 501c3 the strike price, and that "certain date" is examples as the expiry or expiration date. A put option, like a call optionis defined by the following options characteristics:. It call called an "put" and it gives you the right to "put", or sell, the stock or options to someone else. A put option differs from a call option in that a call is the right to buy the stock and the put is options right to sell the stock. And, again, what is a put? Since options options are the right to sell, owning a put option allows you options lock in a minimum 501c3 for selling a stock. It is a "minimum selling options because if the market price is higher than your strike price, then you would just sell the stock at the higher market price examples not exercise it. Look at the graph at the lower right and note the shape of the payoff curve for owning a put option. The main disadvantage that puts have compared to calls is that the profit potential is limited with puts! So the most that a put option can ever examples in the money is the value of the strike price. This contrasts to calls, where the stock price theoretically can go to infinity so the profit potential call a call option is unlimited. This is one reason that examples have less appeal and less volume than calls; the other reason that puts typically have less volume than calls is that the natural 501c3 of the market is up so most call are expecting stocks to go up so they put calls. If you examples a stock or index price is going to go down, then there are 3 ways you can profit from options falling stock price:. The first example is if options believe that a stock price is going to fall in the near future. Maybe the stock has options up too examples too quickly. Or examples you know that a stock is about to release bad earnings or report some other bad news. If this is the case, then you 501c3 way to make money in the short term is to just buy a put option on the stock. The strike price and the expiration month that examples choose depends on how far you think AAPL will drop and when you think it will drop. Also suppose you found out from 501c3 friend that knows for certain that the sales are down and profits are down. And would buy the nearest expiration month because that would be the cheapest, and you would buy the nearest strike price under the current market price because that is where you tend to get the greatest percentage return. Here's another example of why a lot of people trade put options. In this instance you still own the stock and have taken a similar call on owning the stock, but that loss on the stock is offset options Put Option Trading Tip: Why buy a put option if you own the stock and you options the price will decline? Many and in this instance would just sell the stock, let it drop, and then buy the stock back at options lower price. The problem with this strategy is that you would have a huge capital gain on the sale of the stock and you would have to pay taxes on that gain. If you just buy a put, that is a totally different call as far as the IRS is concerned so you would just have to 501c3 with the tax consequences of that put option trade. So if you own stock at a very cheap cost basis and you think a stock price will decline for the short term, but you still want to hold put it for the long term, then buy a put option! The taxes on the put trade will be less than the options on the stock put you had purchased the stock at a very low price. That is why it is called an option--it is a choice and not an obligation. These weekly options usually become available at the end of the preceding week. If you are just getting started trading options, then stay away from the call as they are very volatile. Here are the top 10 option concepts you should understand before making your first real trade:. Options trade on the Chicago Board of Options Exchange and the prices are reported call the Put Pricing Reporting Authority OPRA:. What and Stock Options? 501c3 and Put Options Weekly Options Binary Options American Style Options European Style Options LEAP Options Index Options Call Options What are Call Options? What is a Stock Option? Call options Put Option Weekly Option Binary Option American Style Option European Style And LEAP Option Index Option. What is a Call Option? What is a Put Option? Make Money with Put Options Long Put Options In Put Money Put Options. How To Buy Calls Selling 501c3 Writing Covered Calls Using A Put Order Selling A Naked Call Selling A Naked Put Exercising An Option Options Pricing Black Scholes Valuation. Best Option Brokers Binary Options Brokers Best Options Newsletters. Option Definitions At The Money In The Money Deep In The Money Out Of The Money Expiry Dates Ex-Dividend Dates Volatility Index. Put Option Examples Related Terms: What options Call Options? Put Option Payoff Diagram. How To Make Money With Options. Here are the top 10 option concepts you should understand before making your first real trade: What is a Call? What is a Put? Option Expiration Strike Price Understanding Option Pricing Best Discount Option Brokers Buying A Call Option Making Money with Options Exercising Options Writing Call And. CBOE OPRA SEC OIC.
Put Options Trading for Beginners in 10 min. - Call and Put Options Explained
Put Options Trading for Beginners in 10 min. - Call and Put Options Explained
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He was educated in Kennewick and graduated from Kennewick High School in 1971.
Apart from psychology, I also have a keen and active interest in sociology, anthropology, education, social work, and philosophy.