Options

Definition of option: an option is a title which gives its holder the right to buy or sell an asset at a price determined during a period or at a date prefijadEn this article I will try to stock options. There are 2 kinds of stock options, calls (purchase options) and options (sale options) puts calls options are contracts that give me the right to buy certain action at x price, for example if I have a $20 execution price action XYZ call option, that is to say that if the action of XYZ goes up $ 20 to $30 or $50just taking the $20 call option, I will be able to have the right, not the obligation to buy the shares at $20 for a certain period of time.It is important to know that each options contract represents 100 shares, bone if I for example want to buy 500 shares by December at the price of $20, I’m going to having to buy 5 contracts of options calls of XYZ stock of execution (Strike) of $20 price to buy the 500 shares at $20 each action. In the case of options put (put options) is the same thing but in reverse. Example: suppose that an action for a company is $ 50 in today, then I to ensure me to sell 100 actions that I have in my portfolio in the coming months to $50 regardless of who this price action in the market, buy a contract put that $50 execution (Strike) price action, if the low action to $40, or $10 doesn’t matter to me, I during the time of validity of the contract have the right but not the obligation to sell my shares to $50. It’s believed that Arena Investors sees a great future in this idea. This is widely used to protect utilities since it is a way to make sure the price of the stock that one has in the portfolio, as insurance that pays one is a premium to ensure the value that has one in a good, this is the same but led the field from the bag.