Welcome Guest ( Log In | Register )

> 

CrowdFunding Related Information

 
Reply to this topicStart new topic
What Is Option Trading?
Billy Felix
post Dec 21 2006, 12:24 AM
Post #1


MMG Member
**********

Group: Member
Posts: 1,415
Joined: 7-January 06
From: Virtual Office
Member No.: 17,897



An option is a contract that gives the buyer the right, but not the obligation, to buy or sell the underlying stock at a fixed price (the strike price) on or before a particular date (expiration date).

Options can be used to take a position on the market in an effort to capitalize on an upward or downward market move. The holder of an option has the right, but not the obligation, to buy or sell the asset underlying an options contract. There are two different types of options; a ‘call’ is the right to buy the stock while a ‘put’ is the right to sell the stock. The person who purchases an option is called the ‘buyer’ while the person who originally sells the put or call is the option ‘seller’.

Options can provide an investor with leverage over a position in an individual stock or basket of stocks reflecting the broad market, allowing him to gain exposure to larger amounts of shares for less money than trading in the actual shares.

At the same time, losses are limited. If you get it wrong and the market moves against you, all you lose is the initial premium paid for the contract. However, the seller of an option can have open-ended losses, unless that option is covered.

Another advantage often touted with options trading is the ability to profit in both an up and down market. If you buy a put when you think the company price is going down, and you get it right, you make money.

Could option trading bring you returns of hundreds or thousands in percentage gains in a matter of days? Are these achievable? Not all the time, according to the experts. These theoretical gains are possible, but they are not common. Options are zero-sum situation. If someone were to make thousands of percentage returns, then somebody on the other side of the trade is ‘giving’ you that money and they are losing money.

The returns depend on the investor’s initial intent and this has implications on the way capital is managed, how an exit strategy is planned and how closely a position is monitored. There is no such thing as easy money.


--------------------
Hard to fine a good program that can last even 1 round now day!

Go to the top of the page
 
+Quote Post
Paid Advertisement
 
Go to the top of the page
 
nevercon
post Dec 21 2006, 03:42 AM
Post #2


MMG Member
**********

Group: Member
Posts: 1,204
Joined: 16-December 06
Member No.: 85,442



huh ??? are u providing a definition in option trading or asking the meaning as shown in title ?????

post-36326-1110185726.gif


--------------------
This signature has been edited by MMG Staff. Please view our signature guidelines found here
Go to the top of the page
 
+Quote Post
PeaceLily
post Dec 21 2006, 04:00 AM
Post #3


MMG Member
**********

Group: Member
Posts: 809
Joined: 2-April 06
Member No.: 43,778



rotflmao.gif


--------------------
My life is filled with the rich bounty of the Universe who supplies my every need
Nothing succeeds like success. I now go from success to greater success
Go to the top of the page
 
+Quote Post
gonsaigon
post Dec 21 2006, 05:07 AM
Post #4


Admin of Breakthedrought.net
**********

Group: Member
Posts: 4,939
Joined: 16-August 05
Member No.: 7,539



QUOTE(Billy Felix @ Dec 21 2006, 06:24 PM) [snapback]3396253[/snapback]

An option is a contract that gives the buyer the right, but not the obligation, to buy or sell the underlying stock at a fixed price (the strike price) on or before a particular date (expiration date).

Options can be used to take a position on the market in an effort to capitalize on an upward or downward market move. The holder of an option has the right, but not the obligation, to buy or sell the asset underlying an options contract. There are two different types of options; a ‘call’ is the right to buy the stock while a ‘put’ is the right to sell the stock. The person who purchases an option is called the ‘buyer’ while the person who originally sells the put or call is the option ‘seller’.

Options can provide an investor with leverage over a position in an individual stock or basket of stocks reflecting the broad market, allowing him to gain exposure to larger amounts of shares for less money than trading in the actual shares.

At the same time, losses are limited. If you get it wrong and the market moves against you, all you lose is the initial premium paid for the contract. However, the seller of an option can have open-ended losses, unless that option is covered.

Another advantage often touted with options trading is the ability to profit in both an up and down market. If you buy a put when you think the company price is going down, and you get it right, you make money.

Could option trading bring you returns of hundreds or thousands in percentage gains in a matter of days? Are these achievable? Not all the time, according to the experts. These theoretical gains are possible, but they are not common. Options are zero-sum situation. If someone were to make thousands of percentage returns, then somebody on the other side of the trade is ‘giving’ you that money and they are losing money.

The returns depend on the investor’s initial intent and this has implications on the way capital is managed, how an exit strategy is planned and how closely a position is monitored. There is no such thing as easy money.


Good post Billy.

Pete


--------------------
This signature has been edited by MMG Staff. Please view our signature guidelines found here
Go to the top of the page
 
+Quote Post
c0inX
post Dec 21 2006, 05:47 AM
Post #5


MMG Member
**********

Group: Member
Posts: 137
Joined: 17-May 06
Member No.: 53,356



QUOTE(nevercon @ Dec 21 2006, 07:42 PM) [snapback]3397034[/snapback]

huh ??? are u providing a definition in option trading or asking the meaning as shown in title ?????

post-36326-1110185726.gif

Do you even know what is open trading??

Well Billy share some usefull information for you here if you dont need them just leave.
Great post billy ill save them to my e-mail.


--------------------
scripts x design = c0inX
pm me for details!


Go to the top of the page
 
+Quote Post
jafar00
post Dec 21 2006, 11:15 AM
Post #6


MMG Member
**********

Group: Member
Posts: 3,438
Joined: 24-December 05
Member No.: 15,695



Informative post. That was nice of you.


--------------------
Go to the top of the page
 
+Quote Post
thiec
post Dec 21 2006, 08:48 PM
Post #7


iforexplus
**********

Group: Member
Posts: 2,388
Joined: 4-July 05
From: Ray-Earth
Member No.: 5,987



I think it should move to forex or stock section. but i refer to forex because common practice in forex.

Option is another way to minimize loss by trading but Trade the option need more knowledge than we trade directly to the market. They give some barrier that it can be touch or cross or untouch, so we need good technical and fundamental knowledge, if not you just gamble your luck.

Go to the top of the page
 
+Quote Post
jwc007
post Dec 23 2006, 10:24 AM
Post #8


MMG Member
**********

Group: Member
Posts: 142
Joined: 21-June 05
Member No.: 5,690



A Good and Informative Post. Futures Options is currently one of my areas of study!


--------------------
Fighting for Truth, Justice, and the last slice of Pizza!
Go to the top of the page
 
+Quote Post
dlac2
post Jan 4 2007, 08:23 AM
Post #9


MMG Member
**********

Group: Member
Posts: 102
Joined: 4-December 06
Member No.: 83,549



Anybody ever heard of "Wave Strength" promoted by Adam Lass. With his program, he promises great returns with minimum risk by investing in options. He gives you one pick a week. Has anyone tried this program and if so, how has it gone? From what I understand, options are very risky and you can lose a lot more than your initial investment.


--------------------
Go to the top of the page
 
+Quote Post
prowalker
post Jun 19 2010, 12:08 AM
Post #10


MMG Member
**********

Group: Member
Posts: 35
Joined: 16-June 10
From: India
Member No.: 221,030



In finance option strategy is the purchase and sale of one or various option positions and possibly an underlying position.


--------------------
This signature did not comply with MMG Rules & was removed or edited.
Go to the top of the page
 
+Quote Post
amazingstart
post Jun 20 2010, 04:08 AM
Post #11


New MoneyMaker
*

Group: Member
Posts: 3
Joined: 20-June 10
Member No.: 221,897



very helpful thread for me since I've been researching this subject for quite a while now
Go to the top of the page
 
+Quote Post
johnseay
post Sep 7 2010, 08:00 AM
Post #12


New MoneyMaker
*

Group: Member
Posts: 5
Joined: 25-August 10
Member No.: 237,657



Option trading is probably one of the least understood forms of investment that however can offer a wealth of possibilities for those who get involved into it.


--------------------
Go to the top of the page
 
+Quote Post
punzer
post Sep 7 2010, 10:04 PM
Post #13


New MoneyMaker
*

Group: Member
Posts: 24
Joined: 17-October 09
Member No.: 185,280



so,when we got the money someone out there loss the money,well that made it clear.
Go to the top of the page
 
+Quote Post
Paid Advertisement
 
Go to the top of the page
 

Reply to this topicStart new topic
1 User(s) are reading this topic (1 Guests and 0 Anonymous Users)
0 Members:

 

Skin designed by IPB Forum Skins

FEATURED AD - NEW STATIC AD



Advertise on MMG Today!


Advertisement