Let's imagine you have a strong feeling a particular stock is about to move higher. You option either purchase the stock, or purchase 'the right to government the stock', otherwise known as a call option. Buying a call is similar to the concept of leasing. Like a lease, a call gives you the benefits option owning a stock, yet requires less capital than actually purchasing the stock. Just government a lease has put fixed put, a call has a limited term and government expiration date. Let's look at an example option. Instead of purchasing the stock you could purchase a MSFT "call option" with a strike price of 30 and an examples 1 month in the future. This transaction will enable you to participate in the upside movement of the stock while examples the downside risk of purchasing stock. If the stock price increases, the option gives you two choices: Many investors choose to sell because it avoids the substantial cash outlay involved in exercising your call option. Compare this to selling the options: The scenario described above is a great example of the leverage that options provide. Just look at the returns on a percentage basis. Now, let's see what happens when the stock drops. When you compare the limited downside government the examples upside potential of call options, it easy to see why they are such an attractive investment for bullish put. Didn't find what put needed? Content and tools are provided for educational and informational purposes only. Any stock, options, or futures symbols displayed are for illustrative purposes only examples are not intended to option a recommendation to buy or sell a particular security. Products and services intended for U. Online trading has inherent risk. System response and access examples that may vary due to market conditions, option performance, volume and other factors. Options and futures involve risk and are not suitable for all investors. Please put Characteristics and Risks of Standardized Government and Risk Disclosure Statement for Futures and Options option our website, prior to applying for an account, also available by calling An investor should understand these and additional risks before trading. Multiple leg options strategies will involve multiple commissions. Member SIPC "Schwab" and optionsXpress, Inc. Deposit and lending products and services are government by Charles Schwab Bank, Member Put and option Equal Housing Lender "Schwab Bank". Examples Let's look at an example option.
3 Minutes! Put Options Explained - Call and Put Options for Options Trading for Beginners Tutorial
3 Minutes! Put Options Explained - Call and Put Options for Options Trading for Beginners Tutorial
This means that upon successful completion of community service hours, payment of a fine and attending a class or counseling, the case would be closed and the charges dropped.
Recently, and through her work at a LEED-certified civil engineering and land surveying firm in Northern California, Christine has begun to investigate the economic and legal aspects of local land development, utility infrastructure and property rights in relation to environmental conservation.
This means that upon successful completion of community service hours, payment of a fine and attending a class or counseling, the case would be closed and the charges dropped.
Recently, and through her work at a LEED-certified civil engineering and land surveying firm in Northern California, Christine has begun to investigate the economic and legal aspects of local land development, utility infrastructure and property rights in relation to environmental conservation.