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1. Options give the right to the individual to buy or sell the underlying asset or instrument. 2.  [http://ameblo.jp/gearbean83/entry-11574470794.html Development Never Stops In The Mobile Industry｜Gearbean83のブログ]  is a offensive online database for additional info about why to see about it. You are not required to buy or sell the underlying asset, you just have the correct, if you buy options. Meaning, you can choose to purchase the options, offer the options or do nothing and let it end, depending on what's most advantageous to your place. 3. Choices are either call or put. Call options give the power to the customer to buy the options. Put options give the right to the buyer to sell the options. 4. Possibilities are offered per share, but are sold in 100 share lots. Meaning, if the investor purchases 1 solution, he or she is buying 100 shares. 5. The individual only must pay the choice premium and not the total amount of stocks like in case you are getting per share. As an example, if the option premium of the $50 inventory is $3, the quantity of the contract is $300 per option. Therefore if the investor is buying 3 options at $3 per option, since he or she is buying in 100 reveal lots, the total cost could be $900 (3 options x 100 shares per option x $3 option premium). 6. Buying shares is different. We learned about  [http://ameblo.jp/polandwhite42/entry-11574568170.html uk cell phone numbers]  by browsing books in the library. You've to pay for per share. For instance, the stock price of Company A is $80. If you need to buy 100 shares, you would need to pay $8,000. Although with options, if you wish to spend on 100 shares, you just have to come into a contract where you'd get one option at a certain option premium. 7. If you desire to purchase the stock at the conclusion of the contract, that will be the only time where you'll pay the full amount of money that's equivalent to the number of option contracts, multiplied by contract multiplier. Refer to # 6 like. 8. The owner (or the writer) is required to deliver the underlying asset, if the buyer exercises his rights to get the option (call). 9. The owner is obliged to get the underlying asset, if the consumer exercises his rights to sell the solution (put). 10. If the buyer wishes to exercise his rights to either buy or sell the underlying asset, the vendor should either sell it or buy it at the strike price, regardless of its present price. 1-1. In case the buyer of the option decides to complete nothing at the end of the contract for whatever reason, the seller keeps the option premium as revenue. 1-2. In computing your income, you have to consider 2 things: the choice premium and the strike price. The strike price is $50 and when the option premium is $2, your break-even point is at $52. Therefore for one to make a profit, the stock must be over $52. In the event the stock falls below $52, say $49, and there is no time left, you don't drop $3 per stock. What you will lose, however, is the choice premium you've taken care of the contract. Note: The figures were only selected of the air to illustrate how options trading work. In real-world, figures vary widely so that you have to watchfully examine all of them.