American call options | Finance & Capital Markets | Khan Academy



American Call Options. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/derivative-securities/put-call-options/v/basic-shorting?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Options allow investors and speculators to hedge downside (or upside). It allows them to trade on a belief that prices will change a lot--just not clear about direction. It allows them to benefit in any market (with leverage) if they speculate correctly. This tutorial walks through option basics and even goes into some fairly sophisticated option mechanics. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

Comments

  1. What if you don't have money when the stock hits 80 and you have option to buy at 60?
  2. I thought when you buy an option you have the right to buy 100 of that stock at that price sine options are traded in the hundreds. So correct me if I'm wrong, but couldn't I exercise that option and make (80-50)=30*100=$3000?
  3. Helped me a lot, thx
  4. What playlist is this?
  5. HEY SAL! How do the taxes play out w/ options? Do you have to pay taxes on $60/share or $80/share if you act on it? PS - your drawing skills are at professional levels these days.
  6. this video is just perfect for someone to understand the matter
  7. @echelecopao the seller of the option, because you are exercising it you in fact purchase it at the $60 amount.
  8. This is the first video I ve ever watched on Khan and I have to say I'm not impressed. Im a very novice option trader and I was looking for some intelligent information or tips on option trading. This video completely misses on probably the most important factor in trading options which is an option is a cluster of 100 shares which means that that the $5 in this video actually will cost you $500 so if you let the option expire it will cost you $500 not $5. ill try another.
  9. wow thank you khan.
  10. no music anymore
  11. It's refreshing to see someone not use the term 'right but not obligation'. Horrible wording.
  12. @echelecopao Yes, options trading is a zero-sum game. The call option purchaser (long) will gain $20, whereas the call option seller (short) has lost $20.
  13. This may be a dumb question, but when you exercise the option to buy at $60 when the stock price is actually $80.. who is paying for that $20 dollar difference? Is that loss incurred by whoever sold you the call option?
  14. @eddieschod Finance.
  15. nice! thanks :)


Additional Information:

Visibility: 270007

Duration: 3m 33s

Rating: 277