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 [...]

When Do Options Expire?

A useful piece of information in knowing how to trade stock options is knowing when do options expire. This is basically necessary for options trading as an expired option is a worthless option. When do options expire depends to a degree on the type of option. Regular options expire on the Saturday following the third [...]

Effect of Short Sale Curbs on Options Market

Many in the options markets are concerned about the effect of short sale curbs on options market trading. How to trade options profitably may change a bit with the new rules. As of the end of February new trading rules will place restraints on short selling. If a stock falls more than 10% in a [...]

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 [...]

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 [...]

When to Buy Puts

Puts are options contracts that give the buyer the option but do not confer an obligation to sell 100 shares of an underlying stock for a price stated in the individual options contract. The same contract will confer upon the seller the obligation to buy the same 100 shares of stock [...]

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 [...]

Buying Puts on the Financial Select Sector SPDR

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Buying puts on the financial select sector SPDR multiplied recently as the government entered into consideration of new regulations. Puts to sell outnumbered calls to buy by roughly twenty to one as the SPDR fund price fell nearly two percent, to just above $14 a share. The huge difference has arisen as congress [...]

Writing Puts in Options Trading

Writing puts in options trading is the same as selling puts. The seller of a put option sells the right to sell a stock at a set price, the strike price, on or before a future date. In return the writer or seller of the put option receives the payment of a premium. Writing puts [...]

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