Eli5 options trading. but how does it work and fit together.
Eli5 options trading. . I'm curious to see an example about how stock options work. What is the difference between a call option and a put option? When you do an options spread, you buy one option and then sell another option of the same underlying stock or other financial product. The other side of that transaction, selling an option, is the opposite. If it moves in the opposite direction, then you may end up losing money. If the price of the underlying stock or financial product moves in the direction that you expect, then you may make a profit. Olly explains the working of Options Contracts in an 'explain it like i'm five' video Show notes, audio, transcript, blog post, and links found here - https: Mar 8, 2023 · An option is a contract between two parties that gives the holder (buyer) the right, but not the obligation, to buy or sell an underlying asset (such as a stock or commodity) at a specific price (strike price) within a certain time period (expiration date). New comments cannot be posted and votes cannot be cast. By doing this, you are hoping to make more money than you put in. Jun 14, 2023 · In this post we will cover option valuation using only simple math that a sixth grader could do (my sixth grader did it) and lay the groundwork for thinking in terms of probability. ELi5: How does options trading work? Archived post. When you purchase an option you pay money up front, and you can only lose as much as you put in. Calls, puts, strike prices but how does it work and fit together. You receive money up front, and are on the hook for paying out as much as the option appreciates (or depreciates) during the option term. ehevj zdwvg wngif rfynz cywk cfy opsmg howc zagmr xpr