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If you own stock can you write a put option for it based on the bid ask prices other investors are willing to pay for the option?
Wiki User
∙ 14y ago
When you own stock, you can give other investors the right to BUY those stocks from you by selling CALL OPTIONS, not put options. This is what is known as a Covered Call options trading strategy.
When you sell put options, you are giving investors the right to sell to you stocks at a fixed price. In this case, it will have nothing to do if whether you already own those stocks.
Wiki User
∙ 14y ago
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Why do stock prices go up and down?
Stock prices go up and down based on the changes in investors' demand for a given corporation's stock. That demand is determined by investors' and potential investors' expectations regarding the company's future profits. If potential investors expect that a corporation will make high enough profits in the future, and they want to share in those profits and are willing to pay the current market price for the stock, they will buy stock in the company. But since there are only a fixed number of shares available for sale at any given time, as more and more new investors want to acquire stock in the same company, its price will be bid up until it gets so expensive that the expected future return no longer justifies the investment required to acquire the stock.Similarly, if stockholders get information that leads them to expect that the corporation might not do as well as they originally thought (or it looks as if having stock in another company will yield a better return for them), they will try to sell their shares at the market price. But since new investors will not be willing to pay high prices for stock when there is a big risk that the company might perform poorly, and a lot of current stockholders are trying to sell their shares at the same time, the demand for the stock on the part of new investors will be low, and its price will go down.
Will stock market crash in 2015?
Fluctuations in stock prices are based on an immensely large variety of future events that are inherently unpredictable thus making it impossible to predict with any certainty the future direction of stock prices. It is easy to find many so called experts predicting imminent stock market crashes but their primary primary motivation is based on seeking publicity and then trying to sell novice investors a strategy on how to survive the coming market crash that are predicting. Financial advisory firms who imply that they can predict the future of stock prices are best avoided by serious investors.
The return that investors feel is most likely to occu based on current available information?
The expected return is the return investors feel most likely to occur based on currently available information.
Where can one buy a cheap Ford Focus?
Prices will vary greatly based on location. The newspaper classifieds can sometimes be a lower-priced option than a dealership if used is acceptable. Shop around and compare prices to find the best deal in your area.
Why does the US have such a powerfull economy?
The economy of the USA is based on capitalism. Investors are willing to risk money in order to make a profit. The economy is also based on supply and demand. Whatever the consumer wants produced and will buy, some entrepreneur will provide it. As a result, billions of dollars are spent everyday on American products and billions of products are consumed.
What has the author Ben Craig written?
Ben Craig has written: 'The empirical performance of option based densities of foreign exchange' -- subject(s): Prices, Foreign exchange options, Econometric models
I would like to know if stock option investment have something to do with investing in stocks or just telling you about your finances.?
Stock option investment has to do with investing in stocks and with finances. It can be used for both long and short term investing. It is based on stock prices but is bought and paid with your own finances.
How do you value an option?
Options are valued using a theoretical model known as the "Black Scholes Model". The black scholes model prices options based on what are known as "Greeks", which are mathematical parameters of variables that influences the price of an option. However, this is a theoretical model because it cannot take into consideration the actual supply and demand of an option in the market and such forces does take the price of an option away from their theoretical value.
Prices in a market economy are based on?
The prices in a market economy are based on supply and demand. In a free price system, these are based on several factors like citizen interactions and observations.
What is a composite stock index?
A Stock Market index option is a kind of option. In fact, it is a kind of financial derivative. It is often tied to either a narrow-based index or a broad-based index.
Is the current stock market bullish or bearish?
Based on investor sentiment polls the majority of investors are currently bullish. Bull markets are characterized by an uptrend in stock prices and since 2009 prices have gone virtually straight up the S&P500 Index up almost 300 percent since 2009. Based on the price action of the broad market indices stocks are currently in a bull market.
What are some of key indicators of asset prices that investors consider when performing quantitative investment management?
A lot of things can indicate the prices of assets. One is the revenue, which is a very central part of determining prices. There is also the projected net income, which is important for knowing what will happen to the assets when purchased. A third indicator is the reputation of a company, which can sometimes predict what will happen to a company based on how the company operates. But there are a lot more indicators, but those are just the key ones.
