The classical definition of a stock option entails the right to buy or sell stock at a specified price, usually within a specified period of time. The stock option trader and buyer of a stock option can choose to take action on the option called exercising the option. The right to exercise has a time limit. If within the specified period of time the purchaser has the right to exercise it or to not take action and let the option expire. Trends and counter trends are actively discussed in the Wall Street Journal, Stock Option Trader and other leading financial papers.
Call and put options deliver large leverage to the holder who can play either side of the fence. The call option gives the holder the right to buy the underlying asset whereas the put option allows the holder to sell the underlying asset. Many good books about Wall Street stock option trading are available in bookstores or even available free from your broker.
Exercising the option at the right time if the market moves in your favor, determines if you win or lose. If, for instance, the underlying asset expires worthless, you only lose your protracted option price.
Many models have been developed that accurately evaluate the value of an option through statistical models. This is an important consideration since risk needs to be quantified given the volatile nature of many markets and the great leverage inherent with options.
Low cost leveraging on a ?sure? bet is desirable, especially if one can get a handle on risk. Options provide that vehicle, and if used employing prudent controls, can be highly profitable. Low-cost leverage can be used to protect a position as well as take advantage of a developing market situation.
Many statistical tools that predict price movement are available for technical timing. The main ideas should be based on direction and trend gleaned from news authorities and sources such as the Wall Street Journal or option trader news services.
The stock market, in fact all markets, behave in wave-like oscillations over time. It is important to gauge the direction of the wave before you take a position. If a stock is experiencing a strong upward long-term trend, but the current short-term trend is downward, leading an lagging technical indicators help signal entry and exit points for your trade.
Lagging indicators give a buy signal after the trend has been established whereas a leading indicator give a signal before a trend is initiated. With leading indicators there are many fake-outs. Relying on lagging indicators only would preclude one from catching large gains found early in a trend. - 23309
Call and put options deliver large leverage to the holder who can play either side of the fence. The call option gives the holder the right to buy the underlying asset whereas the put option allows the holder to sell the underlying asset. Many good books about Wall Street stock option trading are available in bookstores or even available free from your broker.
Exercising the option at the right time if the market moves in your favor, determines if you win or lose. If, for instance, the underlying asset expires worthless, you only lose your protracted option price.
Many models have been developed that accurately evaluate the value of an option through statistical models. This is an important consideration since risk needs to be quantified given the volatile nature of many markets and the great leverage inherent with options.
Low cost leveraging on a ?sure? bet is desirable, especially if one can get a handle on risk. Options provide that vehicle, and if used employing prudent controls, can be highly profitable. Low-cost leverage can be used to protect a position as well as take advantage of a developing market situation.
Many statistical tools that predict price movement are available for technical timing. The main ideas should be based on direction and trend gleaned from news authorities and sources such as the Wall Street Journal or option trader news services.
The stock market, in fact all markets, behave in wave-like oscillations over time. It is important to gauge the direction of the wave before you take a position. If a stock is experiencing a strong upward long-term trend, but the current short-term trend is downward, leading an lagging technical indicators help signal entry and exit points for your trade.
Lagging indicators give a buy signal after the trend has been established whereas a leading indicator give a signal before a trend is initiated. With leading indicators there are many fake-outs. Relying on lagging indicators only would preclude one from catching large gains found early in a trend. - 23309
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