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1. Options give the individual the best to buy or sell the underlying asset or instrument. 2. If you buy options, you're not obliged to buy or sell the underlying asset, you just have the proper. Meaning, you can choose to purchase the options, sell the options or do nothing and allow it terminate, depending on what is most good for your situation. 3. Learn more on the affiliated use with - Visit this URL Bird Conway re.vu. Possibilities are either call or put. Call options give the power to the consumer to purchase the options. We found out about http://re.vu/blogscamsfv by searching books in the library. Put options give the buyer the right to sell the options. 4. Choices are quoted per share, but are sold in 100 share lots. Meaning, when the buyer purchases 1 choice, he or she is buying 100 shares. 5. The individual only has to pay the option premium and maybe not just how much of shares like if you are buying per stock. As an example, if the option premium of a 50 stock is 3, the total amount of the contract is 300 per option. So since he or she is buying in 100 discuss lots, if the buyer is buying 3 options at 3 per option, the full fee would be 900 (3 options x 100 shares per option x 3 option premium). 6. Buying stocks differs. You have to pay per share. As an example, the stock price of Company A is 80. You would have to pay 8,000, if you want to buy 100 shares. You have to enter into a contract whereby you would buy one option at a specific option premium, while with choices, if you need to invest on 100 shares. Dig up supplementary information on the link by browsing our ideal link. 7. If you need to buy the stock in the conclusion of the contract, that will be the only time where you'll pay the full amount of money that's equivalent to how many option contracts, multiplied by contract multiplier. Check with #6 for example. Http://Re.Vu/Kalatubonusstreet includes additional information about where to deal with this idea. 8. The vendor (or the writer) is required to deliver the underlying asset, if the buyer exercises his rights to get the solution (call). 9. The seller is required to purchase the underlying asset, if the buyer exercises his rights to market the solution (put). 10. If the consumer needs to exercise his rights to either buy or sell the underlying asset, the vendor should either sell it or buy it at the strike price, whatever the its current price. 1-1. Just in case the customer of the option decides to do nothing at the end-of the agreement for whatever reason, the seller keeps the option premium as income. 12. In computing your income, you've to take into account 2 things the choice premium and the strike price. The strike price is 50 and when the option premium is 2, your break-even point reaches 52. So to ensure that you to make a profit, the stock has to be significantly more than 52. If the stock drops below 52, say 49, and there is no time left, you don't drop 3 per stock. What you'll drop, however, is the choice premium you have covered the agreement. Note The figures were just selected of the air to demonstrate how choices trading work. In real world, numbers vary widely and that means you need to vigilantly study every one of them..