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A futures contract is an agreement to buy or sell on date A, quantity B of stock C for price per share D. When date A comes around, you must buy the stock for that price.
How this can backfire on you is pretty easy to understand. You bought a futures contract to buy 10,000 shares of GM for $30 per share on June 1, 2009. On June 1, 2009, GM declared bankruptcy and its stock closed at 75 cents per share. An instant loss of $29.25 per share (or $292,500 on the whole deal) is enough to forever discourage anyone from trading in stock futures. Futures have a purpose in life--stabilizing the price of commodities for their users--but stock trading isn't one of those purposes.
Options are different: they are like futures but you have the right, not the obligation, to complete the transaction. If you had bought a GM "call" option, you would have the right to buy GM at $30 on June 1. When GM went into the toilet you just wouldn't have exercised the contract. You can also deal in put options, which give their buyers the right to sell stock at a certain price. Puts are often used as insurance policies: if you have a stock you don't trust, you buy a put at the lowest price you want it to fall to. If it DOES fall below that price, you're rid of it.
Michael Kreiger
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What direction will the stock market go tomorrow?
Left to right or if you want from past to future
What does stock market software do?
Stock market software attempts to analyze financial and fiscal information in an effort to predict a stock's future performance. While it is a great tool for an avid stock trader to utilize, it should not be depended on to predict correctly because there are no guarantees.
Which stock exchange is FONSE?
FONSE is derivative market for NSE. under this exchange future and options stocks can buy/sold.
CNN Stock Market operates on which days of the week?
CNN Stock Market operates every day of the week. CNN Stock Market offers information on the latest news and trends on the stock market with stock quotes.
What is the option to sell shares of stock at a specified time in the future called?
It's actually called a call option. I will provide you with a definition I just found for this, and some additional tips on options trading. - - - - - The option to sell shares is a put. The option to buy them is a call.
Where can I learn about stock option research?
Stock Option Research (SOR) is when you analyze the stock market before you make a bid or buy a stock. This can be useful for getting money from the stock market, and you can look around online for good tips.
What is the option to sell stock at a specified time in the future called?
A Put option
Use future in a sentence?
It can be difficult to predict what the stock market will do in the future.
What do you see for the stock market future?
I see success in the stock market future. I stay informed of this information by reads the newspaper and checking appropriate websites on this matter.
What are restricted stock options?
Restricted stock options are usually granted by employers to executives as a means of compensation. A stock option itself, is the right to purchase shares in the business for an agreed upon price (determined by market value at the time of the option's issuance) regardless of future price values. A restricted stock option is true to it's namesake; it is restricted in that the option will never allow for the purchase of stock at lower than 85% of the current value of the stock being purchased.
What is excersing a option?
Exercising an option means exercising your rights to buy or sell the underlying asset in accordance to the parameters of the option. When you exercise a call option, you will get to buy the underlying stock at the strike price no matter what price the stock is trading at in the market. When you exercise a put option, you will get to sell the underlying stock at the strike price no matter what price the stock is selling at in the market. In both cases, the option you own disappears from your account.
What is a stock option tutorial?
A stock option tutorial is an online program, or a seminar that one can take, which is going to teach them which options to purchase in the market .
Where can I learn about stock option administration?
Stock Option Administration are contracts that a lawyer would prepare for you when you are investing in the stock market. You can find information about these at salary.com and other various websites.
What is the meaning of share derivetives?
Derivative means how to minimize the risk of shares in stock market and how to earn more money. There are two types of derivatives. 1. Future 2. Option
What are stock option agreements?
Stock option agreements are what you apply before you actually put money on the market. it is the finalization before you put your business out there. You can choose from many.
Which one has great potential-call option or put option?
Call options allow you to always buy the underlying stock at its strike price before expiration no matter what price the stock is in future and is therefore bought when the underlying stock is expected to go UP. Put options allow you to always sell the underlying stock at its strike price before expiration no matter what price the stock is in future and is therefore bought when the underlying stock is expected to go DOWN. As such, which one has greater potential depends on the prevailing market condition and your general outlook on the trend of the underlying stock. Generally, call options would have more appreciation potential in a bull market and put options would have more appreciation potential in a bear market.
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.
