The Basics Of Options Trading

The options trading is an agreement which confers someone the right to sell or buy a security at a certain price before or on a certain date. These investment options are bought and sold just like every other stocks. There are two main types: the call and the put option. The former is an arrangement where the investor has a right to purchase the security on a date which is fixed. The purchase is normally done before the expiration when the price is in the rising phase. The put option carries the right to sell a specified security at a price which is determined in advance. The purchase must be done before a certain date that is clearly agreed on before. The case here implies that the price would go down hence should be sold to reduce the loss that could In the put option, the trend exhibited is that of a loss and should be cut before its gets more than the investor can bear. Before you invest in them, there are a few things which you need to understand. The investments are normally sold in slots which one has one hundred shares. This is the minimum amount which you can buy. Every contract has a strike price which is the amount a security is bought or sold as clearly stated in the contact.They are identified using the months which they are set to expire. They normally expire on the third Friday of the month. However, when that particular Friday falls on a holiday, then the expiration date falls on Thursday. Although ebinaryoptions.com present a great opportunity to new and seasoned traders, the benefit derived by seasoned traders is of enormous amount. It is a great investment arsenal for those people who would like to spread their wings to cover other investments.