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Put Option

Saturday, September 29, 2007
Filed Under Intermediate Options Trading 

A put option is a contract between two parties (a buyer and a seller) whereby the buyer acquires the right but not the obligation to sell a specified stock or other underlying instrument at a specified price by a specified date. The seller of a put option assumes the obligation of taking delivery of the…click to read more.

Today’s tickers: JBHT, WYNN, VIX, AL, WHR, SYNA, AEO, CVS, RAD, JNPR & TZOO JBHT – Conjecture about consolidation in the transport industry and comments from the analyst community on the “undervalued” nature of the sector as a whole spun options in JB Hunt Transport (JBHT) into a momentum web earlier this week. While the…click to read more.

What Is A Premium?

Friday, September 28, 2007
Filed Under Intermediate Options Trading 

Premium is the total amount of money (price) you pay for an option. So, if the Microsoft (MSFT) May 65 calls cost you $1.50 then the $1.50 is the amount of the premium of the option. The total price of an option (premium) consists of two components. Those two components are intrinsic value and extrinsic…click to read more.

Options Q&A – September 28th, 2007

Friday, September 28, 2007
Filed Under Options Q&A's 

Q: If you buy a call and then sell it back into the market, are you in effect then writing a call and is all of the intrinsic value profit? For example, you buy 1 abc option for $200 at a strike price of $40 and the stock rises to $45. Is your total profit…click to read more.


Friday, September 28, 2007
Filed Under Intermediate Options Trading 

Parity – When we discuss parity in terms of options, we say that parity is the amount by which an option is in the money. Parity refers to the option trading in unison with the stock. This also means that parity and intrinsic value are closely related. When we say that an option is trading…click to read more.

An option can be described by its strike price’s proximity to the stock’s price. An option can either be in-the-money (ITM), out-of-the-money (OTM), or at-the-money (ATM). An at-the-money option is described as an option whose exercise or strike price is approximately equal to the present price of the underlying stock. For instance, if Microsoft (MSFT)…click to read more.

Today’s tickers: BBBY, F, SHW, GM, IYT, DAL, NWA, SLM, CBAK & CSUN From Yahoo! Finance GM – General Motors – Resolution to the auto workers strike was greeted with a 6% pop-up in shares at GM to stand at $36.52. Implied volatility on options traded on the stock dropped by almost one quarter to…click to read more.

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