Day Trading Options

The stock market had a strong month and corrected at the end allowing those day trading options to profit from both advances and retreats of the market. The constantly simmering European debt crisis continues to cast a pall over expectations. It is, to a degree, a lose-lose situation. If the wealthier members of the EU [...]

What are Call Options?

What are call options? In stock trading these are contracts giving the buyer the right to purchase 100 shares of stock per contract. The trader pays a premium to purchase the options contract. He then has the right to buy stock but is under no obligation to do so. The trader will analyze the fundamentals [...]

What Happens to a Call Option if a Company Splits Up?

How to trade stock options can vary with sometimes unforeseen circumstances. For example, what happens to a call option if a company splits up? What happens if the company merges with another company? How about when dividends are paid? For options traded on the CBOE, the Chicago Board Options Exchange, options are adjusted to fit [...]

How to Write a Covered Call

A covered call option is an options contract sold by someone who owns the underlying stock, commodity, or future. To profit from writing calls one needs to learn how to write a covered call. So, what is a covered call? Owning stock provides a cover for selling a call on a stock. If stock prices [...]

How Do Puts and Calls Work?

Puts and calls are types of options contracts. How do puts and calls work? In trading both puts and calls the options trader pays for the right to sell using a put option or right to buy using a call option. Puts and calls are used in trading stocks, commodities, or foreign exchange. The buyer [...]

Who Owns Citigroup?

As the question of who owns Citigroup gets settled, options on Citigroup are through the roof. The news reports that the U.S. government is selling its stake in the financial giant. Who owns Citigroup will no longer be the Feds. Outstanding options contracts on Citigroup surged to over twenty-five million. That translates, of course, to [...]

How Do Call Options Work on General Motors?

How do call options work on General Motors? After the successful initial public offering of General Motors stock the revitalized company’s stock is also listed on options exchanges. The stock has been trading in and around the $34 range and many do not expect to see a rapid increase in share price. Thus, some options [...]

GM Options

After GM’s IPO has returned the auto company to the NYSE the company’s stock will soon be available for options trading. United States options exchanges will be listing call and put GM options as of November 29. Current expectation on the street is that December $35 GM options calls will be around $1.60 bid price [...]

Buying Calls on Retailers

Buying calls on retailers is looking attractive as last month’s sales were the best in over half a year. As the holiday shopping season gets into full swing retailers are offering the usual discounts to get shoppers into their stores. It appears to be paying off as companies such as JCPenny who reported an increase [...]

What Are Calls and Puts?

What are calls and puts in options trading? Calls and puts are the names for the types of contracts used to buy and sell stock, commodity, and futures options. The answer to “What are calls and puts?” depends also, to a degree, upon the point of view of the trader. Calls and [...]

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