trade stock options

MusicRevolution.com, an Online Marketplace for Production Music, Now has Over 15,000 Tracks of Royalty-Free Music

MusicRevolution.com, an Online Marketplace for Production Music, Now has Over 15,000 Tracks of Royalty-Free Music

Trumbull, CT (PRWEB) September 07, 2011

MusicRevolution.com (http://www.musicrevolution.com), an innovative online marketplace for production music, today announced that its production music library now exceeds 15,000 tracks of royalty-free music.

“With over 15,000 tracks of high-quality royalty-free production music online, our community of professional musicians has helped us to create one of the most comprehensive and fastest growing production music libraries available anywhere. We have the royalty-free music to meet almost any music buyer’s needs. And we are adding new production music nearly every day,” stated Chris Cardell, Co-Founder of MusicRevolution LLC. “As a result, media producers, video producers, filmmakers and music buyers are able to access the best and the latest production music at MusicRevolution.com,” added Cardell.

“We are extremely pleased with the participation of the hundreds of professional musicians who are part of the MusicRevolution.com online marketplace for production music who helped us to achieve this milestone. The quality and depth of our musicians is tremendous,” stated Mike Bielenberg, Co-Founder of MusicRevolution LLC. “The next time you need a track for a media project, go to http://www.musicrevolution.com and use our intuitive search function to find the music you need or send us a message at http://www.musicrevolution.com/consultation/ and we’ll be happy to help you find what you need,” added Bielenberg.

MusicRevolution’s royalty-free production music library includes every genre and style of music, including: On Hold, Fun, New Age, Rock, Comedy, Corporate, Drama, Energetic, Orchestral/Classical, Christmas/Holiday, Acoustic Guitar, Hip Hop, Retail, Sentimental, Advertising, Electronica, Country, Jazz, Piano and Vocals.

About MusicRevolution.com

MusicRevolution (http://www.musicrevolution.com) is the Internet’s production music marketplace. We provide media producers, video producers, filmmakers, game developers, businesses and other music buyers with great royalty-free production, or stock, music at affordable prices for TV/radio broadcast, film, corporate video, retail & website background music, legal music for YouTube, on-hold music, sizzle reels and other business music applications. Our production music library has over 15,000 high-quality tracks and new royalty-free music is being added every day. MusicRevolution.com offers four purchase options for customers — single tracks, CDs, subscriptions and our innovative Internet music stream. We also provide custom music production. As an online marketplace, Music Revolution provides professional and aspiring musicians with the opportunity to license their production music while learning from and collaborating with the best in the music community.

About Our Founders

Chris Cardell is the former President of Jupitermedia (formerly a Nasdaq traded company), which was the parent of Jupiterimages, Internet.com and other digital properties. In this role, Cardell also lead the creation of Jupiterimages’ online production music business, which resulted from a series of acquisitions of royalty-free music libraries and websites. Prior to that he was the President of Mecklermedia (formerly a Nasdaq traded company), creator of the Internet World trade shows and magazine. Cardell has been involved with digital content and E-Commerce since the mid-1990′s.

Mike Bielenberg is the former General Manager of Jupiterimages’ online production music business. He founded BBM, a royalty-free music licensing website that was acquired by Jupiterimages. Bielenberg’s music can be heard on cable and network television during any given week. He has composed and produced music for IBM, Coca Cola, Microsoft, The Cartoon Network as well as several major commercial music libraries. He holds a music composition degree from Georgia State University and has received Aegis, Axiem and Telly awards for his original scores. Bielenberg is a professional composer/keyboardist and resides in the Atlanta area.

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What is wrong with the following stock/options trade? It shows enormous returns. Please help!?

Question by AC: What is wrong with the following stock/options trade? It shows enormous returns. Please help!?
To all stock/options investment gurus,

Security: Ebay
Current Price: 33.69
Assumption – Till Jan08 price will be between 0.7 * 33.69 and 2 * 33.69

Leg1 – Collar(call sp,call prem,put sp,put prem)=(1750, 1700, 1750, 20)
Leg2 – VerticalcallSpread(bcall sp,bcall prem,scallsp ,scallp prem)=(5500, 25, 4000, 215)
Leg 3 – VerticalputSpread(bputsp,bputprem,sput sp,sput prem)=(4000, 730, 5500, 2120)
Table of returns is as follows:

Initial Investment: 108

ProjectedPrice,MoneyIn,Gains,GainsPerc
20 250 142 (131.4814814814815)
22 250 142 (131.4814814814815)
24 250 142 (131.4814814814815)
27 250 142 (131.4814814814815)
29 250 142 (131.4814814814815)
31 250 142 (131.4814814814815)
34 250 142 (131.4814814814815)
Same till price = 69.

What is wrong? Commissions are not considered.
Well…

Collar = buy security, sell call, buy put
VerticalcallSpread = buy call, sell call
VerticalputSpread = buy put, sell put

Legs of trade are:

Leg1 – Collar(call sp,call prem,put sp,put prem)=(1750, 1700, 1750, 20)
Leg2 – VerticalcallSpread(bcall sp,bcall prem,scallsp ,scallp prem)=(5500, 25, 4000, 215)
Leg 3 – VerticalputSpread(bputsp,bputprem,sput sp,sput prem)=(4000, 730, 5500, 2120)

sp = strike price for the option
prem = premium for the option

so, bputsp = Buy Put’s Strike Price
sputsp = Sell Put’s Strike Price

Is there any other specific info. that you need ?
Leg1 – Collar(call sp,call prem,put sp,put prem)=(1750, 1700, 1750, 20)

This means:

Buy 100 shares
Sell 1 Call of strike price 17.5 with the premium of 17.0 (Total Price = 1700 = 17 * 100)
Buy 1 Put of strike price 17.5 with premium of 0.20 (Total Price = $ 20 = 0.20 * 100)
Zman, Thanks.

Well.. I agree that Leg1 is separate than Leg2 + Leg3, but then I am using the capital generated by Leg2 + Leg3 to finance Leg1. Hence I clubbed them together. But one can leave Leg1 out.

Also, I agree with you about the American style of options. Here is a shot at the analysis.

There are 3 interesting regions of price line.
R1 : price <= 40
R2 : 40 < price < 55
R3: 55 <= price

In R1 and R3, I am protected by my spread positions (i.e. my liability is 1500)

R2 is tricky as it leaves the sold call and sold put in the money. Lets say I get a assigned on both of these options and lets say that the price is $ 50.

Exercise on put @55:
So I buy at 55 and sell at 50 (market): Net -5

Exercise on call @40:
So I buy at 50 (market) and sell at 40: Net -10

So, at no point my liability is more than -15

Now the tricky part is to analyze the case where only sold put gets assigned and not the sold call.
In that case, I close the sold call position. (Cont'd)
cont'd from the previous one:

Now the sold call (being in money) will hopefully trade linearly with the price of the underlying security (and price of the sold put, which is also in money).

What say you? I would really appreciate your opinion.

Thanks a lot again!
Hi Zman,

Your analysis is quite right. You had said:

Long 1 $ 55 call @ $ 0.25 = $ 25
Long 1 $ 40 put @ $ 7.00 = $ 700
Long 100 shares @ ($ 55 - $ 21) = $ 3,400

Total cost = $ 4,125.

If you end up exercising your long put, your return will be $ 4,000, for a loss of $ 125.

Well, the loss is because the intrinsic value of my long put option is being eaten away by my exercise of the put option. I would do the best of

1. Sell the put + Sell the stock OR
2. Exercise the put

In your analysis, if the assumption is that everything else stays the same, then I think #1 will produce better cost than #2.

My goal is to profit from the decaying time value of the options without incurring any risk.

Thanks for your analysis. It has been extremely helpful!

Best answer:

Answer by Box815
I would but it’s too tough to figure out all the way you’ve noted all these trades. Put it in plain language and I’ll take a look.

Add your own answer in the comments!

Portfolio mobile for Mac gets new services and distribution analysis

Portfolio mobile for Mac gets new services and distribution analysis

Portfolio mobile

San Diego, CA (PRWEB) August 31, 2011

Bare Reef has updated its Mac stock portfolio management application with quote support from Bloomberg, Morningstar and Reuters, as well as basic charts from Reuters. Portfolio mobile aggregates market data from more sources than any other app with quotes from seven different sources, offering the most comprehensive coverage available to investors.

This update also boasts a new comprehensive view of all managed portfolios including profit & loss, performance and distribution by industry. Users can additionally expect distribution graphs for each of their portfolios, creating a more complete picture of their holdings.

“Investors, especially outside of the US, face serious challenges tracking their portfolios. Having more options for sourcing data improves both the breadth of market coverage and the integrity of the data,” says Bare Reef President Greg Hoover.

Portfolio mobile (previously StockTrac) offers the most comprehensive set of features found in any iPad, iPhone or Mac stock portfolio monitoring application. Among them are:

Support for multiple portfolios
Support for trading in multiple currencies
Technical charting
Reporting (Mac / iPad versions)
PUSH-based price alerts (iPad / iPhone versions)
Broker integration using Open Financial Exchange (OFX)
Portfolio performance comparison and charting
Web-based management and backup

Device Requirements:

iPad, iPhone, iPod Touch and Mac
Requires iOS 3.2 or later / Mac OS X 10.6

Pricing and Availability:

Portfolio mobile for iPhone is $ 2.99 USD (or equivalent amount in other currencies). Portfolio mobile for iPhone Pro is $ 19.99 USD (or equivalent amount in other currencies). Portfolio mobile for iPad is $ 19.99 USD (or equivalent amount in other currencies). Portfolio mobile for Mac is $ 24.99 USD (or equivalent amount in other currencies). iPad and iPhone versions are available worldwide exclusively through the App Store in the Finance Category. The Mac version is available worldwide in the App Store and at http://www.portfoliomobile.com.

Bare Reef LCC was founded in 2006 by Greg Hoover to provide customer-driven applications for investors of all backgrounds. Bare Reef develops desktop applications, web-based services and mobile apps for a variety of platforms. Its flagship product, Portfolio mobile (previously StockTrac), comprises a line of mobile and desktop apps that boast an unparalleled feature set and the most responsive support. For further information, review licenses, or to schedule interviews, please contact Bare Reef President Greg Hoover. Copyright (C) 2011 Bare Reef LLC. All Rights Reserved. Apple, the Apple logo, iPhone, iPod and iPad are registered trademarks of Apple Inc. in the U.S. and /or other countries.

Greg Hoover

President

ghoover(at)barereef(dot)com

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Learn To Trade Stops

Order type basics for online stock trading. Learn how to trade market orders, limit orders and stops.
Video Rating: 4 / 5

Trade Stocks Online for Less with New Ultra Low Commissions and Margin Rates from Place Trade

Trade Stocks Online for Less with New Ultra Low Commissions and Margin Rates from Place Trade

www.PlaceTrade.com

Raleigh, NC (PRWEB) August 31, 2011

Sarah M. Place, President and CEO of Place Trade Financial, Inc., [Member FINRA, SIPC], (http://www.placetrade.com), a global full service, discount broker and online trading firm, announced that the firm has lowered its online stock, bond, option and margin rates to some of the lowest rates in the financial services industry. While continuing to offer the lowest commission rates of any known national full service broker dealer; Place Trade has shown that they are true competitors in the online trading arena as well.

In addition to the benefits of the already low commissions and margin rates; Place Trade clients receive savings on their investments via price improvements. In an industry wide Execution Price Comparison, Place Trade’s clearing firm was shown to offer a $ 0.30 price advantage – meaning that experienced traders enjoy verified Net Dollar Price Improvement vs. the national best bid/offer price on their trades. These numbers offer a significant savings to investors who often unknowingly may pay a much higher overall price per transaction while saving a couple of dollars on fixed rate or “free” commissions.

Place Trade’s ultra low commissions for experienced online traders are:

Online stock commissions are only $ 0.01 per share (All-in – minimum $ 2.95).

Online option trades are only $ 0.75 per contract (All-in – minimum $ 1.50).

Place Trade’s margin rates are significantly lower than the national average as well. Current rates range from as low as 1% and are capped at less than 2.10% on lower balances. Both online traders and full service clients will benefit from these ultra low margin rates.

“We are thrilled to offer our clients some of the lowest commissions and margin rates of any national broker dealer,” said Place. “In an era where many firms claim to offer flat or low fees or even free trading Place Trade reminds investors that there is no such thing as a free lunch. Place Trade never competes against its clients and always offers straight forward pricing without bloated fees or spreads that often make those “free” trades very expensive.”

Place Trade is on Facebook at http://www.facebook.com/PlaceTrade and on Twitter @PlaceTrade

Open a free account to trade stocks online today by filling out our simple application at http://us.placetrade.com/index.php/help-me/open-acct.html

About Place Trade Financial, Inc.:

Place Trade Financial, Inc., Member FINRA, SIPC (http://us.placetrade.com), is a global full service, discount brokerage firm with online trading. Headquartered in Raleigh, NC; Place Trade is currently celebrating ten years in the Triangle. Place Trade offers trading in over 90 market centers, spanning 19 countries, trading in several major languages and offering state of the art trading platforms for experienced online traders as well as professional traders and independent registered representatives. Clients can choose to work with an experienced financial advisor or trade online. Place Trade offers a full suite of financial products and services including stocks, bonds, mutual funds, options, 401(k) rollovers, retirement planning, college planning, wealth management, extensive trading tools, unbiased third party research and more. Place Trade is a Municipal Securities Rulemaking Board (MSRB) registered firm as well.

Place Trade has been featured on Bankrate.com, Forbes Magazine, SmartMoney and more.

For questions or comments, contact:

Anneliese Curtis

Place Trade Financial

919-719-7200

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Stock Options – the Greatest Wealth Building Tool Ever Invented

It is a well known fact that serious investors seeking long term growth of capital have as their main objectives the two most basic goals in investing:

• to find an investment vehicle that would effectively preserve capital and minimize risk in the face of a fluctuating and constantly flexing economy

• the investment vehicle must provide better than decent yields in all economic conditions to promote constant growth of capital value.

With the stock market as the premiere choice due to its historical record of outperforming all other investments over time, people are increasingly turning to the stock market as their main investment vehicle for future capital growth. It is here where much higher rates of return can be made with a relatively small increase in risk to capital.

With thousands of books, manuals, internet sites, seminars and courses offering investment strategies and trading systems in the stock market and its derivatives, there are few, if any, that deliver the ideal investment vehicle sought by the long term investor in search of safety and high returns. Not only is there a near total absence of an ideal investment system but there are many that promise eye popping, mind boggling returns and, they are exactly that; mere promises.

Most of the trading systems offered are structured on strategies or activities that work when conditions are ideally suited to the program being peddled. Most of their successes are highly dependent on picking the right stocks at the right time. In other words you must be a good stock picker or use a stock picking service (for a high monthly fee) to select the right ones for you. Market timing is also an important factor in their systems. Again, you must be a good market timer or depend on a service that provides market timing signals (also for a high monthly fee). These supposedly high yield investment programs don’t say anything about how bad things can be when conditions go against their predictions. These programs do exactly as promised: great when the going is good but disastrous when the going is bad. Without doubt many have been taken by these so-called services and while an investor/trader may be successful for a while, the end result over a long period of time is always the same – no better than if you had done the selections yourself.

While there is no one investment system or vehicle that can be an answer-all to the various goals of various investors, there are some investment alternatives that can come close to satisfying the two basic needs of safety and decent returns. Diversified mutual funds have been touted as the answer to these basic needs. But over the years these funds have shown that during downturns in the economy they perform just as badly as the whole investment market in general. And, over the long term, many of these diversified funds have failed to even match market performance in general, much less outperform it.

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Enter market derivatives with emphasis options.

Trading in stock options has become very popular with institutional investors as well as private individuals as a sound money management system supplementing their investment portfolios. The ability of stock options to give the investor a wide range of choices is what has made the options market grow considerably over the last two decades. To quote one options expert: “Stock options are the greatest wealth producing tool ever invented on this planet. . . . if you know how to use them”.

The key element of this statement is: . . . if you know how to use them.

For many people the mere mention of stock options, sends shivers up their spine. They look at options as synonymous with great risk. But isn’t driving a car very dangerous for one who doesn’t know how to drive? The ability of stock options to give the investor a wide range of choices in stock market investments is what has made the options market grow by leaps and bounds over the last twenty years. Statistics compiled by the Options Industry Council, a group that educates investors about options, show that volume in options trading has risen tremendously in recent years. Further, studies show that individual investors make up 60% of the market.

For the individual who has sufficient funds and is looking for more than a decent return on his capital and with controllable risk, stock options may be the answer.

There are dozens of option trading systems being employed by individual investors and institutions. Each system is designed to accomplish a specific investment goal. A financial institution may use long put options to hedge its winnings in stocks that have appreciated in value. Another investor may buy call options instead of stocks to enter a position in a security that has caught his fancy. Still another may sell calls against his stock holdings to generate income from his stock position, or what is popularly known as covered call writing.

Of the dozens of option trading systems there is one that can be carried out as a long term investment program offering a fair degree of safety and consistent high returns over time, thus satisfying the investor’s two basic needs of safety and return.

This is the selling of uncovered or naked options.

But wait! Is it not said that selling naked options carries the risk of unlimited losses? Isn’t this a contradiction?

Indeed selling naked options when done carelessly and without a disciplined strategic program is extremely risky!

But by using a carefully planned and disciplined system of trading, the so-called “unlimited risk” factor in selling options can easily be conquered. There is a three-pronged trading strategy being used by one successful options trader that is proving to be a consistent winner in all market conditions. It is a trading technique that couples naked option selling with a modified ratio credit spread and the use of the roll over feature. While naked option selling has acquired a bad rap of being highly risky, this three-pronged trading strategy allows the trader to defeat the risk. Not only is the system able to substantially reduce the risk, it also offers one the ability to become a savvy investor/trader without having to depend on picking the right stocks or timing the market.

It involves utilizing the system in any market condition using only one or a few stocks, ETFs or indexes (the latter two are more effective). One need not worry about finding the right stocks or timing the trades. The fact remains that stocks behave, more often than not, in crazy and irrational ways so that one can almost say that consistently choosing winning stocks is as good as a random walk down Wall Street. Rather than be proactive and try to predict and time the market, as many try to do, this three-pronged investment system is reactive. The prescribed trades are done in reaction to how the market has moved, not in anticipation of its future behavior.

This three-pronged trading system does not promise quick profits or mind boggling yields but steady annual returns in excess of 30%. Many are averaging returns of 50% to 60%. It would be prudent to say that in times of deep downturns the system may not deliver the promised returns but it will hold its own and will definitely outperform the market.

One options trader that has mastered this three-pronged trading technique has decided to share his knowledge of the system by writing an e-book on its methodology. Borrowing from that quote about options being a great wealth producing tool he has aptly titled his work: STOCK OPTIONS: THE GREATEST WEALTH BUILDING TOOL EVER INVENTED. In it he details the step by step methodology of this trading technique and gives an exhaustive series of sample trades covering several months of transactions. It shows the effectiveness of the system in an up market, down market and horizontal market using only one ETF stock. To this day the writer continues to use only one or two ETFs in all his options trades and he includes a web page that shows his current and actual trading results month by month on an ongoing frequency.

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Learn How to Trade Stock with Online Option

Online Option Stock Trading is it for you? Some Info You Should Know Before You Take The Plunge.

The trading of stocks and options has certainly met with a great deal of new enthusiasm as of late. Many people who have never hired a stock broker, or even traded a single stock for that matter, are being attracted to the option of trading online preferably than in the traditional manner. One of the main rationalities behind this is that most of the newer generation of stock traders have literally grown up using a personal computer for more or less any task for which it’s able.

Get Best Penny Stock Pick Program to help you to make profit!

As you can probably guess, given the chance to utilize online option stock trading, this newer generation of investors will happily go online to trade. One of the advantages to online option stock trading is the power to see real time gains and losses of stocks being traded. This allows market savvy traders to be able to identify which way the stock prices have most potential to go. Another big advantage which online option stock trading offers is the chance for the trader to spot and foresee stock price variations. The ability to speculate when a price fluctuation will occur can greatly heighten the trader’s profits.

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Being able to foresee when a price fluctuation may happen can also enable investors to hold on to a stock longer than they would usually if they are anticipating a price surge. Naturally this also goes with its own risks, , if the trader has a bullish position, and if the price falls drastically instead of rising, then the investor could stand to lose a significant amount of capital. One of the main attributes of any successful investor is a good sense of timing.

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Online option stock trading is available for all types of stocks. It makes no difference what type of stock that you may be interested in trading, because you’ll find that online option stock trading covers all stocks. Want to trade common shares? You can trade it online. You will also find that you can trade issue stock, story stock, penny stock, treasury shares, synthetic stock, preferred shares, and widow-and-orphan stock.

Another huge advantage that online option stock trading offers investors is a rather fast and fairly cheap method to trade stocks. These trades can be made from anywhere that the investor can find an internet access, at home or on the road. Some of the online option stock trading websites also give investors a trial demo account so that they can practice trading before they invest any capital. These demo accounts also act as stock trading training, allowing the investors to see how everything works and to get comfortable with online trading.

One thing is for certain; before you begin online option stock trading, be sure you fully understand all of the inherent risks associated with online option stock trading. Always do your research before picking a stock, and if you’re uncertain of your abilities, consult a broker.

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How Stock Options Work for Employers – Idea of Trading Stocks and Options as a Real Business

Many companies are increasingly offering stock options to their employees. This is a new strategy that conglomerates and even small companies have adopted it to woo the skilled work force towards them. Intrigued by this new strategy, I decided to explore how stock options work and why are their benefits for employees and employers. My findings about this subject have been presented in the following lines as stock option basics.

A stock is a small quantum of ownership in the company. Public listed companies have their stocks traded in stock markets. The stock value is a direct indicator of the performance of the company. After this brief overview of what stocks are, let us see how stock options work.

What are Stock Options?

A stock option is a small number of company stocks offered to employees at a reduced or market level price, as part of company incentives. It is a chance for the employee to share the ownership of the company that he or she is helping in running. The stocks are usually offered at a price that is substantially lower than or level with their market value. The stock options are also made available to third parties as a contract. Fore more on that refer to the article on stock options explained.

This price at which stock options are sold to employees is known as ‘strike price’ or ‘grant’. The time period in which these stocks can be bought by employees is decided by the company. This time frame in which the employees are granted with a right to purchase stock is called the vesting period. This period may be spread over a few years. Exercising stock options can be done at any point of time in this vesting period. Now that you know what are stock options, let us see how stock options work for employer and employees in the next section.

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How Stock Options Work for Employees?

For the employees, stock options are opportunities to gain assets which can be of great value for the future. They can profit from stock investing and bet on their own company performance. These stocks may come at a discounted price, compared to market value, which further benefits them. With stock options offered, an employee feels even more connected and motivated to work for that company than before. If a company is really doing well, the stock options become high value assets for the future. With a long vesting period, employees can buy stock whenever they can save enough in the future, which is highly convenient.

How Stock Options Work for Employers?

The stock options explained above must have made it clear as to why employers prefer offering them. One prime reason is to motivate the employees and to boost their morale. It is seen as an effective way reducing the attrition rate by human resource managers. Once an employee becomes a shareholder, his interests automatically get aligned with company interests even more. Some companies in the start up phase offer stock options to employees as they are short of cash at that point. The stock options are offered in such a case, with the hope that as the business rises, they will be worth a lot more.

The employers have another advantage of company stock, within their inner circle, instead of it being offered to third parties. Ultimately, a skilled work force is the true asset of any company and offering stock options is one way of sharing the profits that a company makes due to their personal efforts.

Hope this article has left no doubt in your mind about how stock options work and what benefits they hold for an employer and employees. Offering stock options is a very smart strategy to get the employees involved in the working of their company and literally take ‘ownership’. As I see it, in the long run, stock options are an effective way of retaining talented work force and is a total win/win situation for both parties.

Get ready for a whole new way of looking at your investments. You can stop worrying about the economy and the so-called recession because this ‘underground’ trader is about to tell you how..visit.The Trading Pro Coach

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How To Invest In Stock Options – The Mechanics Of Call Options

Investing in the stock market can be particularly tricky. One part of the stock market that many individual investors seem to have a great deal of trouble understanding is the options market. Many people find options trading to be incredibly complicated, but the fact of the matter is… it can be quite easy once you get to know it and understand its workings.

In this article I want to discuss some of the basics of stock options as far as the mechanics of call options go. That is I want to talk about what call options are and how you can profit from them.

There are basically two types of stock options. The first kind is called a “call” option. A call option gives you the right to buy a security at a set price sometime in the future. The second kind of option is called a “put” option. A put option gives you the right to sell a security at a set price sometime in the future.

I think most of your average investors understand that concept fairly easily, but when you get into more specifics things start to get a little confusing and that’s a shame because it’s not that much more complicated than what I just said above.

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I think the best way to explain is to simply give you an example. Imagine a company’s stock sells for a share. You want to buy a call option that expires in three months giving you the right to buy one share of stock in the company for . What this means is that anytime in the next three months you have the option to buy a share of stock for only no matter how high the share price has risen too. It’s easy to understand how you would make money on such a strategy. If the share price rises to a share within three months, then you have the right to buy it at only … at which time you could turn around and sell it on the major stock market and pocket the difference as your profit.

The price of purchasing that option, which is known as a premium, may be just .50 cents. That .50 represents basically the time value of the option and it is usually based on the length of time before the option expires as well as sometimes the likelihood of the stock actually reaching that specific option price.

If most investors think that there is a very large chance that the stock will reach a share, then the price of that option is going to be much higher.

The risk involved in purchasing this type of option is also easily understandable. If the price of the share doesn’t rise to a share, then your option will expire and be completely worthless. So what is your risk? Well, it’s easy… you risk that $ .50 or whatever it cost you to buy the option and you’ll lose that money if the share price doesn’t rise above a share.

Now imagine that the shares have risen in price to per share. Your call option is now worth . How did I figure that? It’s easy, you have the right to buy the share at a share and you can sell that same share on the market for a share. minus equals which is what your option is now valued at. Think about it; that option that you bought for $ .50 is now worth !

Pretty easy huh?  Yes it is. Investing in call options doesn’t have to be any more difficult than that.

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