Options
Say strike price is $50 and call option price is $3. You buy 100 shares (5000) option paid $300. Price rise to $55 and option to $7 you exercise option by buying and selling stock gain is 5500-300-5000= 200. With only optom profit is 700- 300=400 and vice versa for Decrease in price and put option.
Risk is as if price decreases loss will be higher and it can be speculative in nature.
Say strike price is $50 and call option price is $3. You buy 100 shares (5000) option paid $300. Price rise to $55 and option to $7 you exercise option by buying and selling stock gain is 5500-300-5000= 200. With only optom profit is 700- 300=400 and vice versa for Decrease in price and put option.
Risk is as if price decreases loss will be higher and it can be speculative in nature.
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