Choice bases

Choice bases

By derived product we mean that it is a product its value on is based or from the price from still something is derived. Since we speak about shares, a share option is based on among other things the price of the underlying supply.

There are also elections on other acted shares such as currencies, indices and interest rates, but we limit our discussion here to share options or the elections, which are based on shares.

A unterscheidener factor of a choice is, which is a disparaging value in the direction the fact that it has a limited life and before the date must be used, on which she runs off. While time passes, the choice loses value, while it moves more naeeher at its expiration date

If we speak of the elections in volumes expressed, we refer us to contracts. Each share option contract is equivalent with 100 kapitalanteilen. If we speak about two contracts, we speak 10
contracts about 200 portions,; we speak 75 contracts of 7500 portions about 1.000 portions, and so on.

Quantity of equivalent quantity of shares of contracts of option 100 1 200 2 1000 10 7500 75 15000 150 50000 500 100000 1000

NOTE: It is important to include/understand the cost of the dollar of options before really trading them. When an option is quoted to $1.00 per contract, the investor must realize that the $1.00 represents a price of $1.00 per share, not by contract. You point out that each contract is worth the sorrow 100 shares. This means that if you must buy a contract of option at an announced price of $1.00, your total cost will be $100.00 (1 contract X $1.00 per share X 100 shares per contract). If you must buy 10 contracts for $1.50 per contract, your total cost will be $1500.00. Employ the formula below when total cost calculator of the dollar of the option.

You go up at the cost of the dollar commercial = of the number of prices of contracts X per contract X 100

The contracts of option are literally an agreement of sales between two parts. The two parts are the purchaser (or support) and the salesman (or author). When you buy a contract of option you are regarded as length the option. When you sell a contract of option, you are regarded as short the option. This, naturally, supposes that you did not have any preceding position in the aforementioned option.

In contract of option, although it seems like if the purchaser and the salesman must be attached together, they are not. You see, the purchaser really does not buy of the salesman and the salesman is not really sold to the purchaser.

Actually, an organization called the stages of OCC gold Options Clearing Corporation between the two sides. Purchases of OCC of the salesman and the sales to the purchaser. This made the neutral of OCC, and it allows the purchaser and the salesman the trade out of a position without implying the other part.