Give me examples of Put Options and Call Options?

Question

I am having so much trouble understanding these two concepts. Can someone please give me a real life example (okay, or a made up example) of how each option works? Also what is a common scenario that this kind of trade would take place?

Answer 1

Think of them as a rain check. A call option is where you pay the store manager a small fee to keep the sale price for you for a certain amount of time. A put option is where you pay a used car salesman a small fee to guarantee a sell price for you to sell at for a fixed period of time. Unlike a store's rain check where the fee is usually a deposit towards the price, you don't get your fees back with options but you can sell your right to the price to someone else.

Answer 2

Example Of A Put Option

Answer 3

1

Answer 4

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RE:

Give me examples of Put Options and Call Options?

I am having so much trouble understanding these two concepts. Can someone please give me a real life example (okay, or a made up example) of how each option works? Also what is a common scenario that this kind of trade would take place?

Answer 5

There are two basic options (four if you include writing options). They are CALLS & PUTS. If you buy (give money) for a CALL you think the underlying is going UP. If you buy (give money) for a PUT then you think the underlying is going down. So if you are writing those two options (selling to open) then you think the opposite. That's it!!

Another thing to remember is to CALL something is to buy it or get it from someone else. To PUT something is to sell or put it onto someone else.

Another point is: If you are buying (or giving money) then you have control of the option. If you are selling (to open) or taking money then you give away control of the option.

Answer 6

SIMPLE ANSWER:



Buy call options when you think price will go up and then sell the call options when profitable.



Buy put options when you think price will go down and then sell the put options when profitable.



If you want to know exactly how both kinds of options work and their underlying mechanisms, how are these options related to the underlying stock and the various ways you can profit from them, you need to read the free tutorial below:

Answer 7

In binary options you will have the possibility to predict the movement of various assets such as stocks, currency pairs, commodities and indices. Learn how you can make money trading binary options https://tinyurl.im/aH5EP An option has only two outcomes (hence the name "binary" options). This is because the value of an asset can only go up or down during a given time frame. Your task will be to predict if the value of an asset with either go up or down during a certain amount of time.

Answer 8

Trading binary options online is not as complicated as many people think it is. Read here https://tr.im/MuSaf



You don’t have to be an economics expert in order to make money by trading binary options. The charts allow you to predict the future course of an asset by finding patterns in its past price movements, and after all this what we need to win a binary trade.



Don't be intimidated by the charts, actually they are not that hard to read and understand. Strategies that are based on reading and analyzing charts are part of the technical analysis area.

Answer 9

You buy a call option if you believe the market or stock will go up in price. Call options INCREASE in value as the underlying asset (the stock you are betting on) goes UP in price. Then you sell the call option after you made a profit.



You buy a put option if you believe the market or stock will go down in price. Put options INCREASE in value as the underlying asset (the stock you are betting on) goes DOWN in price. Then you sell the put option after you made a profit.

Answer 10

Here are some sources and examples of options:



Put Options

http://www.investopedia.com/search/default.aspx?q=put+option#axzz1adY0a0G9

Put Option Basics - Investopedia Videos

Put option allow investors to hedge an investment they own or speculate in an investment they don't own. ... Put Option Basics. Next video in playlist: ...

www.investopedia.com > Videos

Put Option Definition

Put Option - Definition of Put Option on Investopedia - An option contract giving the owner the right, but not the obligation, to sell a specified amount of an ...

www.investopedia.com > Dictionary

Put Definition

... The buyer of a put option estimates that the underlying asset will drop below the exercise price before the expiration date. ... How is a put option exercised? ...

www.investopedia.com > Dictionary

How To Manage Bull Put Option Spreads

... How To Manage Bull Put Option Spreads. Tweet. Posted: Feb 23, 2011 | Reprints Icon Reprints Email Icon Email. Print Icon Print. ...

www.investopedia.com > Articles

How is a put option exercised?

A put option is a contract that gives the option holder the right, but not obligation, to sell a set amount of shares (100 shares per contract) at a set price. ...

www.investopedia.com > FAQs

When does one sell a put, and when does one sell a call?

... When does one sell a put option, and when does one sell a call option? The incorporation of options into all types of investment ...



Read more: http://www.investopedia.com/search/default.aspx?q=put+option#ixzz1adYRloTM



Call Options

Call Option Basics - Investopedia Videos

... Call Option Basics. Next video in playlist: Watch Video: Explaining The Naked Call. ...

www.investopedia.com > Videos

Call Option Definition

Call Option - Definition of Call Option on Investopedia - An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity ...

www.investopedia.com > Dictionary

Conditional Call Option Definition

Conditional Call Option - Definition of Conditional Call Option on Investopedia - A provision that requires the issuer of a callable bond to replace the bond ...

www.investopedia.com > Dictionary

Asset-or-Nothing Call Option Definition

Asset-or-Nothing Call Option - Definition of Asset-or-Nothing Call Option on Investopedia - An option payoff that is equal to the asset's price if the asset ...

www.investopedia.com > Dictionary

Interest Rate Call Option Definition

Interest Rate Call Option - Definition of Interest Rate Call Option on Investopedia - An interest rate derivative in which the holder has the right to receive ...

www.investopedia.com > Dictionary

An Alternative Covered Call Options Trading Strategy

... a traditional covered-call write on RMBS, we would buy 100 shares of the stock and pay $3,860, and then sell an at-the-money or out-of-the-money call option. ...

www.investopedia.com > Articles

When does one sell a put, and when does one sell a call?

... When does one sell a put option, and when does one sell a call option? The incorporation of options into all types of investment ...

www.investopedia.com > FAQs





Read more: http://www.investopedia.com/search/default.aspx?q=call+option#ixzz1adYiaQkV

Answer 11

the best trading software http://tradingsolution.info

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