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Where are Options Traded?

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Option contracts are traded either; on a public stock exchange (also known as ETO's (Exchange Traded Options)) implicity agreed between two parties (also known as OTC's (Over The Counter options)). The majority of options, however, are traded via public exchange houses and these will be the options discussed throughout this web site. The OTC market is a complicated one, where traders from large institutions can create and trade non-standard option derivatives. They can, for example, add their own special rules such as: if the underlying stock trades as high as x then the contract terminates and the option is then worthless. This is known as a Knockout Option or a Barrier Up and Out Option. Options are listed and standardized by the stock exchange and are traded by what is known as Serial Months. By standardized, I mean that the specifications that make up the option contracts are set by the stock exchange and cannot be changed. Here is a snapshot of the August 2005 options f...
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Why Trade Options

Option trading provides many advantages over other investment vehicles. Leverage, limited risk, insurance, profiting in bear markets, each way betting or market going nowhere are only a few. But let's look at a couple: Leverage One thing to note before we go on is that the buyer of an options contract pays an amount, known as the premium, to the option seller. An option seller is also known as the writer of the option. The option premium is simply the amount paid for the option - but there is more about this under the Pricing link. When you buy an option contract from an option seller, you aren't actually buying anything - no asset is actually transferred until the buyer chooses to exercise. It is just an agreement where the buyer has the option to decide if the transfer is to take place. But the option contracts value is determined by the underlying asset - Microsoft Shares as an example. Options give the buyer the right to buy a number of shares of the underlying instrumen...
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Learn About Option Trading

Option trading has many advantages over other investment vehicles. Trading in option contracts can give an investor the flexibility to place bets on very specific market outcomes. For example, an option trader can make a bet that in 6 months time a stock will be trading either above a certain price or below a lower price - an each way bet if you will. If the stock trades between these two prices in 6 months, the trader will lose a predetermined amount. This type of option strategy is known as a Long Straddle or could also be a Long Strangle . Option contracts also provide traders with an enormous amount of leverage. In the US, 1 option contract represents 100 underlying shares. In other countries, such as Australia, option contracts can be in multiplies of 1,000 times the underlying stock or commodity. So, with a relatively small amount of money an option trader can control a very large underlying stock position. Because of this, option trading can also be a very risky venture...
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Hello All my Friend in the World

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For the first time thank you for visited my blog site. In this blog i will sharing my knowledge about forex and option trading. Other i will share about Software and Legend Story that i have write. I Hope all my blogger friend can review my post and send back your writing to my blog. And if you like with my blog please donate my blog with click the google adsense that residing in my blog. Thanks to All My Blogger friend in the world.
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First Posting About Internet Profits

Internet is the larger's place to make profits online with internet we can make money with easily try it.
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