TAILIEUCHUNG - Elaine Scott - Stocks And Bonds Profits And Losses - A Quick Look At Financial Markets 1985_8

Tham khảo tài liệu 'elaine scott - stocks and bonds profits and losses - a quick look at financial markets 1985_8', tài chính - ngân hàng, đầu tư chứng khoán phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | your intuition is correct and the stock rises to 50 within the time period you have in your option then you are free to exercise that option. Although the stock is selling on the market at 50 you can purchase it for 25. Of course there is a fee for this service. The broker charges you a percentage usually between 10 percent and 15 percent of the stock s value when you buy the option so this particular option could have cost you 250 to 375 but that s a small price to pay for doubling your money. And what if you were wrong and the stock never made it to 50 a share You simply let your option expire. True you ve lost what it cost you but that s better than having invested 2 500 and watched it disappear. The situation works in reverse as well. An option to sell stock at a specific price and time is called a put option and people buy those to give themselves insurance that they will always be able to sell their stock for at least a minimum price usually what they have paid for it. If the stock rises above that price they can let their put option expire. 63 Lending Your Money 6 A Look at Bonds 65