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is there a game that allows you to buy stock options and excercise them? even investopedia lets you buy options but i cant seem to find an option to buy an option then excercise the option.....instead of just selling the option.
anyone know?
What are stock options? I know I can look it up quickly but it helps to get it in layman's terms.
each contract that gives you the option (not the obligation) to buy 100 shares of the underlying stock. you can buy more than 1 option, so 2 stock options give you the right to buy $200 shares if you choose to.
-you spend less money on options than buying the underlying stock.
-your losses are capped at the premium (how much you spend to buy the option)
-the option can expire if you dont exercise it.
-you can buy call options, which give you the right to buy stock at a specified price BEFORE a specified date. (like a stock option that says you can buy 100 shares of apple at $450 per share before October 2012. if we get to october, and apple is trading at $420 then the option is worthless becuase if you buy 100 shares of apple at $450 a share, and the stock is trading at $420 a share, you are fucked)
if you buy a call option you are waiting for the market to rally and go up, so that you can excercise your option(s) at the lower price. then you can turn around and sell the stock or just hold it. once you exercise the option and buy the 100 shares of stock, you do what you want.
you can buy put options, which give you the right to sell stock at a specified price before a specified date. if you buy a put option (the right to sell) you basically want the stock to go down in price, so that you can turn around and buy the stock at a lower price and then excercise the put option (and sell at the strike price, which is the price agreed upon on the contract). its like you sell the stock before you even buy it. instead of buy low, sell high, you can have the right to sell high and then buy low later. this is if you think the stock is about to tank, like amazon did yesterday
but, you can also buy and sell the options themselvessince its a contract, you can sell the contract before it expires.
it gets more complicated when you buy options in pairs. you can buy calls, puts, calls and puts, sell calls and buy puts, sell puts buy calls. you can also buy stock then hedge your position with options to either make money or to protect your stock position.
lets use google as an example (GOOG) and this is for example purpose only.
google is trading at 584 a share. lets say you bought 10 shares of google when the price was $500 a share.
now, tomorrow the job numbers are coming out. you know from previous history that with the job numbers google takes a dip when the numbers are bad or negative or below what analysts expect. you dont want to sell the stock because you want to hold it long term. so you buy a put option, meaning you have the right to sell google at $584, and tomorrow when the stock takes a dip to, say $550, you can
1) buy google at 550 then turn around and sell it for $584 (because you have the option contract), or
2) you can sell the option, and make money from the premium
you spend less money to have alot of leverage and the gain is unlimited. but the option expires, so you need the stock to go where you want, either up or down enough for you to make a profit once you deduct what you paid for the option.
another option is to short the stock, then buy a call option as protection in case the stock goes up.
the strategy is unlimited and people are making thousands just buying and selling options.
Thanks...that was an education and a half. Going to read it several more time and do some research and studing. I just started and just going by the analyst is saying and not doing made. First two days of February made a G. January was pretty damn good. I know I need to learn a lot more after just reading above. Thanks once again.
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How much money you droppin on mnta
1000. gonna do a little DD ovver weekend on it. its 1 of 2 stocks im watching for next week. i normally play the pinks but MNTA does look like a decent flip.
im fukking with options now, I had a call on bidu that flipped 90% it was crazy because the stock only moved liek 2% down then like 1.8 back up and that bitch ran to a 90% return, I only had a few hundread in since i am/was getting my feet wet but chit I'll take that all day.
my next one (im still in) is a gmcr put after they jumped 25% i expected it to drop but that run attracted so many new buyers that volume was almost double and the stock price barely moved .20 cent << that tells you there were just as many buyers as sellers that day.
Anyway I've held it since its a march option and now its up 20% Ill see how next week goes and see if I can get that $$$.
ahh I did a day trade on a DMND option the day thier chit dropped from firing the ceo/cfo, I got 30 @ .15 per contract, sold a few hours later @ .20, 33%.
Since I watch my %'s so far I'm banked one @ 90%, one @ 33% and have that other one still in the game up 20%.
Like I said I fukks with the options!
I had a partner in it pretty heavy turned me onto a couple books but this chit im on now is just taking chances and banking on typical stock buyers psychology. I run the basic principles that the normal investor does I buy low, and sale high Its just in options those swings can happen quick.How did you learn to trade options?
Im going to get my options game on. Apple cant keep running forever
Apple at $500. Whats the next play? Is it too late to get in or is it time to start shorting? Thoughts?
I wanted to short apple at 490 last week. I dont have the guts. But id rather buy put option than short. Apple has a mind of its own, and I dont have the guts tow short apple.
I dont think anyone knows when to short apple. if apple revenue and earnings are lower than what analysts estimate it will be a bloodbath.
Ill see what others say, IMO if apple continues to meet/beat estimates its gonna go north of 550, especially if those damn new ipads fly off the shelves.
I dont think anyone can definitively tell you to buy now.
Hit me with that info.
Do you know where I can get info about which companies are waiting for FDA approvals?
There are a few paid services that give investors breaking news instantly but I'm not trying to pay right now until I'm playing with major money.
I may need to date someone who works at the fda![]()
Going to buy some Starbucks......
They are doing very well targeting the emerging markets (BRIC).
They just signed an agreement with Tata Beverages in India.
I like that because Indians trust and respect Tata in everything that they do.
There is also a base of returning Indians who are already familiar with the brand and what it represents.
Check out the stock and it's performance over the last 3 yrs during the recession.
SBUX
Hopefully by the end of the yr I'm like this:
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