Stock Options Step-by-Step



Fundamentals of call options and put options explained in academic context

Comments

  1. Why doesn't the break even price equal the strike price plus the premium divided by 100? because by you can buy 100 shares with one options contract. Thanks and great video
  2. Very clear and useful
  3. i love u man, like no homo and all but i love u man...
  4. BEST video I've seen!!!! Thank you
  5. Thank you,this video has been the clearest fundamental video I have viewed! All the best... Fred
  6. Thanks for clearing this point bro, really appreciate it.
  7. Let's say you purchased the option initially from W for $10. The writer of the option, W, will always keep the premium no matter what happens. Now let's assume you're selling the option in open market to X for $50. This means X will pay you $50 and your net profit = $50 - $10 = $40. Your original premium is still with W who keeps the premium for taking the risk.
  8. Apparently, you're referring to a call option. It'll be clearer if we take this step-by-step Step 1 - X buys a call option from W who writes or sells the option Step 2 - You buy the option from X in open market. X is completely out of the picture Step 3 - Y buys the option from you, and you are completely out of the picture Step 4 - Y exercises the option, W, the original writer, is still obligated to deliver the stock to Y Remember, only the seller (not the buyer) of a call option delivers.
  9. second question: If I bought a call option at 10$, and it went up to 50$, and I want to sell it and get profit, If I sold it at 50$, will I get my premiume back i.e 50$ in total or is it going to be 40$??
  10. quick question: If I buy a call option from X and after 1 week I sold it with 50% profit to Y, and Y also made profit on the option. but instead of selling or letting it expire, Y wants to exercise the option, so if he exercise his option who will sell him STOCK (to Y), is it going to be ME or X or somone else??


Additional Information:

Visibility: 14784

Duration: 11m 0s

Rating: 125