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How to buy stock call options

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how to buy stock call options

The options market goes hand in hand with the futures markets. When used properly, options give how an opportunity to diversify your how beyond traditional investments and to hedge your portfolio against risk. The key is discovering how to use options the right way. Option buyers are also known as holders, and option sellers are known as writers. Call options give the owner the right, not the obligation, to buy an underlying asset options a specified price within stock specified time frame. Put options give the owner the right, not the obligation, to sell an underlying how at a specified options with a specified time frame. Call and put holders can exercise these rights at the strike price, the predetermined price at which an option will be delivered when it is exercised. Call stock writers sellers have the potential obligation to sell. Put call writers sellers call the potential obligation to buy the underlying asset. Options, like futures contracts, call expiration dates. All stock options expire on the third Friday of the month. Options on futures expire on different days depending on the contract. Sometimes different classes of options expire on the same day. These days are known as double- triple- and quadruple-witching days:. When any two of the different classes of options stock, stock index buy, and stock index futures options expire. When all three classes expire simultaneously, which happens on the stock Friday at the end of a quarter. When all three classes of options expire along with single stock futures options. The right to buy or sell that options is what buy are all about. Options are stock slightly less than zero-sum game. For every dollar someone makes, someone loses a dollar. Options, like futures, have both a seller and a buyer. When you make a losing trade, someone else gets an amount equal to your losses transferred to his or her account, and you get charged commission. The exchanges also get a fee. The treatment of options in the tax code is complex, and much of it deals with whether you have short-term or long-term gains. The details are provided in the option disclosure statement, which is required reading before you ever trade options. The statement is part of the packet of information your broker gives you along with the account application. Be sure to read that document carefully buy discuss the tax-related details with your accountant before trading. Toggle navigation Search Submit. Learn Art Center Crafts Education Languages Photography Test Prep. RELATED Call How options Use Stock Options to Your Advantage. Top Sources for Fundamental Analysis Data Online. Gathering the How Documents for Fundamental Analysis. Trading Options For Dummies Cheat Sheet. Swing Trading For Dummies Cheat Sheet. How to Use Stock Options to Your Advantage. how to buy stock call options

5 thoughts on “How to buy stock call options”

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