Call maybe or put?

Image12 courtesy of StuartMiles at freedigitalphotos.net

Image12 courtesy of StuartMiles at freedigitalphotos.net

Do you want to control large amounts of stock for pennies on a dollar? Well who wouldn’t? With call and put options you can!

Each option that is purchased controls 100 shares of stock. For example the cost of an option might be $3 per share, so to control the 100 shares of stock it would cost $300. To purchase that stock, it might be $160 per share, so to purchase that same 100 shares would cost $16,000. With options you have the power of leverage!

Call and put options give you the right to buy (call) and sell (put) a stock at a specified price for a certain period of time. Always remember there is a time element to these options and you will recognize a gain if the stock price goes up (call) or down (put) enough to cover your costs (the stock price plus the cost of the option). If the option expires at or below the stock option price they are worth nothing. Zero, zip, nada! Keep your eye on those options…

Please comment on your success with trading stock options.

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