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Stock Options and Futures

Options are the right to buy or sell a security at a set price over a specified period of time. Futures are contracts to buy or sell assets at a set price on a predetermined future date.

500 Questions

Do you have to have a stock broker to do options trading?

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Asked by Wiki User

No, you don't necessarily need a stockbroker for options trading. Many online platforms and brokerages offer self-directed options trading accounts, allowing individuals to independently execute options trades. However, understanding the risks and complexities is crucial for successful options trading.

How do you buy an apple stock option?

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Asked by Wiki User

Go to a broker that sells options, like Scottrade, open an account and buy one.

What is the ticker for ikea?

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Asked by Wiki User

IKEA is not a publicly held company. Therefore, it has no stock symbol.

What is the ticker symbol for Apollo Group?

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Asked by Wiki User

The ticker symbol for Apollo Group is APOL and it is traded on the Nasdaq.

What is the insider trading and the regulation that relate to it?

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Asked by Wiki User

Insider Trading is one where an individual with upfront information about a company or organization and its business buys the stock of that company before the news goes public thereby gaining an undue advantage over the rest of the investors.

For Ex: Let us say you are the managing director of ABC Bank Ltd which is a stock market listed company. After weeks of negotiation you know that ICICI bank the country's leading bank has accepted to buy your company and issues shares of its own company to investors who hold shares of your company. As any intelligent investor would know, shares of an ICICI Bank are much more valuable than shares of an ABC Bank. Once this news of ICICI acquiring ABC Bank goes public people will start accumulating shares of ABC Bank so that they can benefit out of the acquisition. This will send the price of ABC Bank skyrocketing. So, knowing this information, if you buy shares of ABC Bank for your personal share trading account before this news goes public, you can sell them off once the acquisition is complete and the share price has exploded. This way you gain an undue advantage and make a profit at the expense of the company.

This is insider trading.

So, to avoid this almost all company's have rules related to trading of its own shares by its employees especially ones that are higher up in the food chain. Employees of a company cannot buy/sell shares of their company during predetermined windows every year for ex: during quarterly financial result announcing period. This is to avoid those employees who may possess vital statistics reg. the company performance from taking advantage of this to make quick bucks in the stock market.

By now you are mumbling, what else constitutes insider trading. Let us say your brother in law or uncle is working for a large organization which is going to post impressive annual results. He tips you of the same and you buy shares of that company. Though there is no rule stopping you from buying the share because you are not its employee, it is illegal because you got the inside information from your relative who is working for them. Hence this too constitutes Insider Trading.

Or, let us say you work for a brokerage firm for example ICICI Direct and you are a relationship manager who gets detailed reports about stock recommendations to the valued customers of the brokerage house. You are only supposed to share this information with your clients and not anyone else. You cannot buy shares from your wife's account based on the recommendations or tip of your friend or relative to do the same because this is proprietary insider information which is meant strictly for the customers of the brokerage house and not everyone else. Hence this too constitutes Insider Trading.

Coming to a hypothetical situation - Lets say you are in a restaurant and a bunch of businessmen in your neighboring table are talking aloud about their company's results and expecting jump in their share prices, you go ahead and buy the share prices. Though you heard from an insider about the company and bought the share, you do not have any concrete evidence that the company is indeed doing great and the share price may go up. In all probabilities the shares may go down and you may lose your money. Since your decision to buy the share would be considered an impulsive buy based on a rumor you heard, this will not constitute Insider Trading. But do remember the fact that, you are risking your hard earned money based on some small talk you heard in a restaurant is dangerous and it could all be a bluff and you may end up losing money.

When is a contract option may be exercised?

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Asked by Wiki User

you can put obtion when you see the flacuaton in rapid market.

What is specific about futures contracts?

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Asked by Wiki User

Four things:

the commodity being sold

the amount of that commodity you'll get

the price per unit

and the settlement date

If you buy a CME copper futures contract...

the commodity is Grade 1 electrolytic copper cathodes, full plate or cut, conforming to ASTM specifications for this metal, and physically delivered

the amount is 25,000 pounds

the price is in cents per pound

and the settlement date depends on the contract you bought.

What is TD Ameritrade stock option investing?

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Asked by Wiki User

TD Ameritrade is often done online where you can look at stock trading, investing, and other online stock options. It is a good idea to talk with a broker before you do that, however.

What are some of the best online trading futures?

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Asked by Wiki User

Some of the best online trading futures are in commodities such as oil and gold. Investors have the opportunity to benefit from the regular price swings in commodities while maintaining low transactions costs, high leverage, access to price movements as well as the ability to offset their obligations before the futures are delivered.

What is a stock option agreement?

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Asked by Wiki User

A stock option agreement is a contract between two parties that that allows one party to buy or sell a particular asset at an agreed upon price at a future date. Professional is usually a good way to go. That way you are sure all the details are fine tuned by someone who knows what they are doing.

What are the worst stocks to invest in?

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Asked by Wiki User

Anything priced under $5 per share, which is called a penny stock. (Used to be, penny stocks were under $1 per share, but everything gets more expensive.) Penny stocks are more likely to go down in price than to go up, so they are the worst stocks to invest in.

What is a person called who buys shares and sells them immediately?

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Asked by Wiki User

The closest thing I can think of is a day trader--someone who gets out of all her positions before the end of the trading day. This is an EXTREMELY risky practice and most people who try it lose their asses, but it's possible to make money doing it if you have a very keen sense of the market.

What are options?

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Asked by Wiki User

According to Optiontradingpedia.com,

"A stock option is a contract that gives the buyer the "right" or "power", but not the "obligation", to exercise the contract on or before a fixed future date (the exercise date or expiration) to trade the underlying stock at an agreed price."

Essentially, it is a trading instrument that gives you leverage if used purely for speculation and protection if used as a hedge. The various options strategies that can be made using options also gives traders a precise mean of trading almost every outlook on a stock.

Where can one learn about futures trade?

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Asked by Wiki User

Futures are traded through brokers. Before choosing a futures broker it is important to check with the National Futures Association to see if any disciplinary action has been taken against the firm. Look for a broker with integrity and a great deal of familiarity with commodity you wish to trade. Futurespros.com has a list of online futures brokers and is a great place to start your broker search.

What are the disadvantages of options trading?

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Asked by Wiki User

Some of the disadvantages include the major risk that you are taking. You may buy the stock at a high price, but have to sell if much lower. Another disadvantage is the other missed opportunities. The most that you could make by selling in option is the price of an option.

What do you mean by Bombay Stock Exchange?

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Asked by Wiki User

Bombay Stock Exchange:

The BSE is the oldest stock exchange in Asia. It is situated in Dalal Street in Mumbai. It is the third largest stock exchange in south Asia and the tenth largest in the world. BSE has over 5000 companies that are listed in it. The objectives of the BSE are similar to that of the NSE. BSE also uses the latest technologies in the IT field to provide a single place where traders from across the world can buy/sell shares in the Indian share market.

BSE Index:

The BSE Index or the Sensex as it is popularly known, is the index of the performance of the 30 largest & most profitable, popular companies listed in the index. Each company that is part of the index has its own weightage in the value of the Index. Since the number of countries involved is lesser, the index variations are higher when compared to the Nifty index.

Who regulates the stock exhanges in India?

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Asked by Wiki User

SEBI is the primary governing/regulatory body for the securities market in India. All transactions in the securities market in india are governed & regulated by SEBI.

SEBI stands for Securities and Exchanges Board of India

What does futures trading involve?

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Asked by Wiki User

It involves investing in business and the stock market.I would be careful in what you invest your money in and who you invest your money with. don't get scammed like people did with bernie madeoff.

What is ramen noodle's stock ticker?

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Asked by Wiki User

Ramen noodles are a type of noodle, not a company, so the question cannot be answered without knowing which brand of ramen noodles is meant. Nissin Foods makes the Top Ramen brand. Maruchan, Inc., a division of Toyo Suisan, makes Maruchan Ramen Noodles. Nissin Foods trades on the Tokyo Stock Exchange under ticker symbol 2897. Toyo Suisan trades on the Tokyo Stock Exchange under ticker symbol 2875.

Can you buy a percentage of a stock?

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Asked by Wiki User

You can buy any percentage of a stock listed on the stock exchange. The dollar amount invested in a stock will be rounded and issued based on the stock price at time of purchase.

What exactly is Option trading?

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Asked by Wiki User

An option is the right to buy or sell a certain amount of stocks, an index or another sort of investment at a certain price and at a certain time. Usually this right can only be exercised on one special day which is fixed in advance. Some options in Europe enable the investor to exercise the option during a certain period of time. Example: A stock is trading at $40; the right to buy one stock at the price of 39 is worth $1. If the price falls below the strike price of 39 the option is not worthless until the day of expire due to the fact that the stock might rise above that level. If the price is higher than 39 the option is "in the money" if below (out of the money) if exactly or approximately at the strike price it is called "at the money". The main advantage of options is the fact that you have to invest only a small part of the money you would need to invest to have the same opportunities. If the stock price rises from 40 to 42 the inner value (stock price-strike price) has risen from 1 to §3. An increase of 5% of the stock led to a profit of 200%. If the price falls, you lose a higher percantage of your money. If the price falls below the strike price and closes there on the last day your investment is worthless.

How does options trading work?

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Asked by Wiki User

On Options trading there are only two possible outcomes to the trade. The trader needs to choose whether the price of an asset will go up or down. in case that you win (forecasting the right direction) you can make as much as even 80% in one hour.

You need to take into account that if you lose (the asset price go to the opposite direction from your forecast) you lose all 100%. so there is big potential but a lot of risk.

When should you buy put option and call option?

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Asked by Deepthysai

In commercial contracts, there are situations of defaults/deadlock between the parties. In such a situation parties are given options, like put and call options as exit strategy. A call option is a mechanism wherein a party can call the another party to do something. Such kind of arrangements can specially be seen in shareholders/joint venture agreement where in case of default first party can ask the second party to sell its shares to first party.