Options Tutorial

Description: Options Trading, Options History, Trading Strategy, Put Options, Call Options, Options Chart, Options Symbol

Options History - Brief excurse in the options trading history starting from the early 1600s when in Europe the options started to attract tulip dealers who wanted to secure the reasonable price in the future.

Options Overview - Short overview of the options trading which has become one of the most popular trading vehicles on the stock market.

Why Options - Some investors may choose to use options to protect a portfolio. The options could be used to protect the owned stocks against sudden downward pressure.

Options Expiration - The expiration date for all listed options in the U.S. is the third Friday of the expiration month (except when it falls on a holiday, in which case it is on Thursday).

Options Types - Listed Options are Exchange traded options. From the name of these options you may see that these options are listed on the Exchange and they could be bought and sold on the Exchange.

Options Styles - The most of the U.S. listed options are American style options that could be exercised on any trading day from the day the options were purchased and until the expiration date.
 
Calls and Puts - Call options deliver profit when the stock price moves up. The put options buyer expects the price of the underlying stock to drop, while the put options seller would profit on the rising market.

Call Options - The call buyer profits when the underlying stock price moves up and looses when the stock drops in price. The maximum the options buyer can lose is the premium paid for options - 100% of the invested funds.

Put Options - The put options are considered in-the money if the current stock price is below the strike price and the put options are considered out-of-the-money if the current stock price is above the strike price.

Options Chart - The purpose of this chart is to show a simple way of using options.

Option Symbol - The options symbols are build by the certain rules and once a trader understands these rules there is no more confusion in the using option symbols.

Exercise and Expiration - When options are exercised a broker representing an options buyer submit an exercise notice to either the Clearing Corporation or to the Exchange to purchase the underlying assets.

Intrinsic and Time Value - The options premium could be divided into two parts: intrinsic options value and options time value.

In the Money Options - Out the Money Options - Understanding when the options are in or out the money are critical in defining risk and building a options trading strategy.

Trading strategy - As much as it is important to develop a liable trading system, it is important to develop trading strategy of using this system. Without correctly developed strategy  even a profitable trading system may fail.

Options trading strategy - It is a good practice to develop money trading (money allocation) strategy before jumping into options trading. Even a good trading system in can become fatal when it used in wrong way.

Minimum Invested Amount - How much to invest in a trading system? This is the most common question many traders are asking. While the calculations are very simple traders could be confused where to start from.

 

Trading System - Signals - Options Tutorial - Index Trading - Technical Analysis - Glossary - ETFs - Quotes

Financial and Investments Directories: Banking - Brokerage Services - Currencies Trading - ETFs Trading - Mortgages and Loans - Futures Trading - Insurance - Mutual Funds - Options Trading - Stocks Trading