Profitable Since 1983
The Complete Option Report
|Home||Tools & Services||Getting Started||Advanced Option Trading||Audio & Video Reports||About Us||Contact Us|
Free Trial Offer: Get The Weekly Option Report
You'll get fresh stock option trading ideas, strategies, and option techniques just for asking - no cost, no obligation.
Plus you'll get Ken Trester's stock options market commentary. No Charge - Subscribe Now - Cancel Anytime. Enter Your E-Mail Address Below
A Guide Around the Options World: Some Definitions
I know this is boring stuff but when some one asks you a question or tells you how to make a trade you better know what he's talking about.
Your risk if you are uncertain? You'll lose money and I know you're not here to do that.
While trading options is not hard there is, in some
cases, unique language and terms. Here's a quick around the world of
Options are perhaps the most
versatile tool in all of the investment world. You can use options to
make very simple but profitable trades, or they can be part of complex
trades for a variety of investment goals.
When you buy an option you are
renting the profit right to a stock for a limited amount of time.
The technical definition is... "An option is a contract that gives one person the right, but not the obligation, to purchase or sell a set amount of a stock at a set price for a set amount of time." Our explanation is simpler. They both mean the same thing.
2 Types of Options
#1 A call option gives its owner the right to buy the underlying stock. Call option buyers want the stock price to rise, as you would if you bought the stock.
A put option gives its owner the right to sell the
underlying stock. Put buyers want the price of the stock to fall.
This is the stock the option contract gives you the right to buy or
sell. If you buy an option on IBM the underlying stock is IBM.
Don’t pay more for an option than the price we recommend. If you pay too much for an option you ruin the strategy.
The best and easiest way to get
the correct price that we list is to tell your broker to use a "limit
order." Limit orders are usually good for one day. If the option price
moves higher before you can purchase it, wait a few days and try again
if the stock price is still the same and the option has a few months
Just be certain that the stock
and option prices are still in line with our recommended prices.
If you're going it alone then just be certain that
you're paying a fair price when you buy an option.
|Legal, Publishing and Trading Information: The Complete Option Report is published by Ultimate Option Strategies Company; 1494 Union Street San Diego, California. Managing Editor: Ken Trester. Senior Editor: Jeff Carter Publisher: Ron Jackson. It is a violation of United States laws to duplicate or reprint this publication for redistribution in any quantity without permission. Copyright ©2009-2010. All rights reserved. We advise all readers that there can be high risk in options trading. You can lose your entire investment. Individual results may vary from those achieved by the newsletter, and no actual investment positions are taken by the newsletter. It cannot be assumed that present or future recommendations will be profitable or equal past performance. The information contained herein has been obtained from sources believed to be reliable but there is no guarantee it is accurate or complete and it should not be relied upon. This publication should only be used by sophisticated investors who are fully aware of the risks in options trading. Additional Legal Notices and Terms of Purchase.|