Notes

Know Your Stock Options Table
Options are one of the most widely used terms in investment and trading. The various financial products that are based on stock options are financial products which provide purchasers with the right to purchase or sell shares of underlying shares at an stated price for a specified period of time. The key feature of options is the ability to gain cash value even if the price of the underlying stock rises or falls during the duration of the option contract. The main two types of stock options are call options and put options.

A stock options table enables traders to identify the underlying asset and the option they want to buy or sell. Most often, the options are strike price or call option. In options trading, there are two main categories of options such as call and put options. A call option gives the buyer the right to buy or sell a specific amount of shares at an stated price within a specified time frame. On the other hand, a put option gives the seller the right to sell or buy a specific amount of shares at a specified price within a specified time frame. To exercise Two12 , the buyer or seller has to pay an upfront fee called the option money.

There are different types of calls and puts available. Call option gives the buyer the right to purchase a specified volume of shares at a specified price within a defined time frame. It can be exercised before the expiration day or the strike price. A put option gives the seller the right to sell a specified volume of shares at a specified price within a defined time frame. It cannot be exercised before the expiry date or the strike price.

Generally, the seller has to pay the premium. But if he exercises the option before the specified time, he has to pay the option money. Two12 vary depending upon the strike price and the expiration date. Options are also known as 'call option' and 'put option'. An investor can buy or sell stocks as an individual or as a member of a company.

To exercise the option, an investor has to purchase an option contract with a broker. The cost of such option contracts depends upon the type of stock which is supposed to be traded, the selling price and the quantity which is expected to be sold or purchased. Usually, the brokers charge higher brokerage fee for stock options than for ordinary stock transactions. Since stock options have a wide range of definitions, they are also referred as global investments. Thus, if an investor wants to invest in all kinds of stocks, whether they are domestic or foreign, he has to look up a stock options table to determine the market value.

Options trading, as they are popularly known, involves buying or selling securities by paying the particular option price, which is known as the strike price, plus the brokerage fee. This fee is referred to as the premium. A call option gives the buyer the right to purchase a certain amount of stock at a specified price within a specific time. If the buyer intends to sell the stock before it strikes, he has to pay the seller the call option fee along with the selling price. A put option gives the buyer the right to sell the securities at a specified price within a specified period.

An options trader also needs to know the risk/reward trade offs that he will have to face. Usually, when an investor buys stock options, he assumes that his investment will appreciate in value. However, what usually happens with options is that they lose their value during the initial period. This is because an option can only be exercised when the stock or shares are not in the trader's direct control.

At times, when the stock or shares face a downward trend, the premiums that are paid for options may tend to increase. This is especially true in the initial months of the downward trend. Once the trend changes direction and the market conditions reverse, the option sellers have to either exercise the call or put option and again charge a higher premium.
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