I recently heard about a new product being offered on AMEX called the “FRO” or Fixed Return Options. Basically, these are binary options, or in other words there are 2 options at expiration. They offer a fixed return of $100 per contract. If you are in the money at expiration, you get $100. If you [...]
Entries Tagged as 'Understanding Options'
Options Pricing
December 5th, 2007 · No Comments · Options 101
Main Components of an Options Premium The premium of an option has two main components: intrinsic value and time value. Intrinsic Value (Calls): When the underlying security’s price is higher than the strike price a call option is said to be “in-the-money.” Intrinsic Value (Puts): If the underlying security’s price is less than the strike [...]
Tags: Understanding Options
A little more in depth about buying and selling in the Options Market
December 4th, 2007 · No Comments · Uncategorized
So once again, options come in two varieties, calls and puts, and you can buy or sell either type. You make those choices – whether to buy or sell and whether to choose a call or a put – based on what you want to achieve as an options investor. If you buy a call, [...]
Tags: Understanding Options
Getting Started in Options
November 29th, 2007 · 1 Comment · Options 101
What is an “Option”? An option is a contract to buy or sell a specific financial product officially known as the option’s underlying instrument or underlying interest. It establishes a specific price, called the strike price, at which the contract may be exercised, or acted on. It has an expiration date. When an option expires, [...]
Tags: calls·option trading·Options·premiums·puts·Understanding Options
