Understanding Calls and Puts

Call v. Put Call: -Allows you to buy stock -If you have one call that means you are able to buy that stock at your set price -It has to reach the set price on or before your contract's expiration -If it doesn't reach the set price, your contract deteriorates in value and you lose your option premium -You buy it in hopes of stock going up -As the stock price goes up, the call increases in value -Similar to going long within stocks Put: -Allows you to sell stock (it gives you the right, but not the obligation) -For example: you own 100 shares of Microsoft at $25 and you own a put of Microsoft at $20 -If the stock declines to $10/share and you have the put for that year, you can put somebody the stock at the $20 range -You buy it in hopes of stock going down -As the stock price goes down, the put increases in value -You are hoping to sell the contract later at higher value -Similar to short-selling Continue to learn with me at: http://tradersfly.com/ Check out my courses at : http://rise2learn.com Facebook Fan Page: http://www.facebook.com/tradersfly/ Get My Charts on Twitter: https://twitter.com/tradersfly/

Comments

1. what is the best platform to trade options?
2. thank you!! you made it easier
3. Ok
4. do i need a margin account to do puts and calls?
5. Wouldn't make sense to put a call and a put on the same stock? You can't lose either way. Correct?
6. Why would someone buy your put. So, if I have 100 shares at 100$, with a put at 80$, and the stock drops to 60, why would I be able to sell my shares at 80 still? Why would anyone buy by 80$ share over the open price of 60$ per share
7. thanks
8. very well explained
9. how many stocks can u buy or sell with the contract?
10. my question is how long does the buy and put options last?
11. Hi, great video! I'm now learning about options. I have a few dumb questions. Why and who would purchase stock above the market price? And who sells the stock below the market price? Are these transactions with the broker or the company? I'm unsure of the parties in these transactions. Thanks.
12. so puts are how people make money off of shorting?
13. A call is an option to buy a stock. As the stock price goes up the value of the call goes up ie the demand to own that call option or the option to buy stock increase. So in other words as stock becomes more expensive your right to buy this stock at a strike price determined by the call option cause the value of the option to increase.
    An option to sell or put option allows the seller the right but not the obligation to sell a stock at a predetermined price. If the stock price drops the put option increases because you can still sell this stock at a higher price.
    Option values are determined by 4 factors :1.volalitly in the market2.time to expiration 3 . stock price4.strike price5.interest rates
14. I was having trouble with the difference between the two, but you perfectly explained that difference. Thanks a ton!
15. how you explain long put and short put?
16. Great video. you explained it very well
17. Do you know where I can get a qauility stock screener
18. If i buy a put contract and I made an profit can I sell the contract to make an profit as well as a call option? If i bought a put/call options at 75 and the strike price is 74.93 on a call option what do i need to make a profit as for put if the strike is 74.93 and i bought a put for 72 how do i make a profit
19. is this the same or similar as bull market vs bear market?
20. very nice and simple!