Options Trading Strategy - Futures Trading - Covered Call Options 321

Certain companies pay stockholders dividends, a portion of the company's earnings, in cash or stock. If you purchased the puts your profit would be ($500 + $15 - $450) * 100 = $6500. You buy puts with a strike of $25 1 month to expiration for say $1. Say you only want to protect your stock from a decline for 1 month. You buy calls and puts with the same strike price on Starbucks (SBUX) and same expiration month. Say you only write 1 contract, you will receive $600. Fundamentally, the call writer will profit when the stock price remains at or below the strike price as the call will expire worthless while the investor keeps the premium. The more money owners pour into their investments, the easier it would be to attract adequate financing. It is important to have a historical knowledge of the antique before purchase as this often helps in deciding its resale price. The risk/reward profile is very similar to the Long Put; thats why it is also know as a synthetic Put. This type of investment can be rewarding if the company's value skyrockets. Say you only want to protect your stock from a decline for 1 month. These payments are normally larger than dividends the company would pay stockholders. Stocks, mutual funds, and bonds are only a few of the investment opportunities available to you, but they are the foundation of most investor's portfolios. An Option is said to have intrinsic value (or in-the-money) when the current market price promises a profit in trade. You would say that you want to buy October 50 calls on intel.The broker would look up his options window and find out the price of calls. Disadvantages: High minimum investment; no interest payments; interest rates are usually lower than with longer-term investments. It is important to have a historical knowledge of the antique before purchase as this often helps in deciding its resale price. Married Put: This strategy is implemented by buying the stock and buying a put on the stock. Say you have $1500, you would be able to cover shorting 3 shares. For more about options strategy please visit where you have access to more detailed descriptions of options trading strategies including risk/reward profiles, when each should be used, and break even points. I am not trying to encourage speculation here but some of us speculate from time to time. There are many option strategies that one can employ and master over time. This investment option ensures that instead of blindly gambling on some company of their choice, the investor can put his money with a fund that manages the cash on behalf of their clients. To be conservative you write put options with a strike price at the money ($120) for $6 each and an expiry in 1 month. When the decision is announce the stock will most likely move dramatically in one direction. Investors use this strategy when they think a large price more will occur in a stock but are unsure of which direction the stock will move. Mutual Fund Money-Market Accounts - In this case money is pooled by a number of investors into a mutual fund that buys short-term securities like Treasury securities, high-quality bank certificates of deposit, etc.

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