• Is slang for a market position.
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| ||Option: A marketable security contract that fixes the purchase price of some other security at a point in time.Gives the buyer the right, but not the obligation, to buy or sell an asset at a set price on or before a given date. Investors, not companies, issue options. Investors who purchase call options Bet the stock will be worth more than the price set by the option (the strike price), plus the price they paid for the option itself. Buyers of put options bet the stock's price will go down below the price set by the option. An option is part of a class of securities called derivatives, so named because these securities derive their value from the worth of an underlying investment.An instrument that provides its holder with an opportunity to purchase or sell a specified asset at a stated price on or before a set expiration date.(1) Call option: A contract sold for a price that gives the holder the right to buy from the writer of the option, over a specified period, a specified amount of securities at a specified price.|
(2) Put option: A contract sold for a price that gives the holder the right to sell to the writer of the contract, over a specified period, specified amount of securities at a specified price.A security that represents the right to buy or sell a specified amount of an underlying stock, bond, futures contract, etc. at a specified price within a specified time. The purchaser acquires a right, and the seller assumes an obligation.Is a derivative contract. There are two primary types of options. See Put and Call. An option is considered as a Wasting Asset because it has a stipulated life to expiration and may expire worthless. Hence, the premium would be wasted.
| ||Selling short: A Bet by an investor that a stock will go down in price. The investor borrows the stock from a broker, sells it, and eventually buys it back on the market and returns the new shares to the broker. If the stock declines in price between the time the investor sells the shares and buys them back, a profit is realized.If an investor thinks the price of a stock is going down, the investor could borrow the stock from a broker and sell it. Eventually, the investor must buy the stock back on the open market. For instance, you borrow 1000 shares of XYZ on July 1 and sell it for $8 per share. Then, on Aug 1, you purchase 1000 shares of XYZ at $7 per share. You've made $1000 (less commissions and other fees) by selling short.|
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