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i believe there are long-term options avaialable for blue-chip names...
options that expire in 1 to 2 years...? i am not sure what they are called...
...you might want to look into them
as well/instead
RAY RAFFURTY wrote:
> Hi Jawad,
>
> One of the best things about options is their flexibility, one of
> the worst things is their flexibility {;-)
>
> First you must understand the types of options. A call give the
> buyer the right (but not the obligation) to buy 100 shares of stock at a
> specified price, the strike price, for a specified time, the expiration
> date. A put give the buyer the right to sell 100 shares of stock at a
> specified price for a specified time.
>
> You can be either a buyer of the option or a seller. You can also
> chose from puts or calls with many strike prices and several expiration
> dates. Some basic examples are:
>
> If you believe IBM is going up you could "Buy to open" a call, you would pay
> the premium. If IBM moves up in a short time the call will become more
> valuable. The risk of loss is fixed to the amount you pay for the option,
> the potential is unlimited.
>
> OR you could "Sell to open" a put and collect the premium. If IBM goes up
> the put becomes less valuable, but you as the seller keep the premium. The
> amount you make is limited to the amount you collect at the sale but the
> risk is UNLIMITED, since if IBM goes down you would be responsible for the
> difference between the strike price and the lower stock price.
>
> If you believe IBM is going down you could "Buy to open" a put, you would
> pay the premium. If IBM moves down in a short time the put will become more
> valuable. The risk of loss is fixed to the amount you pay for the option,
> the potential is unlimited.
>
> OR you could "Sell to open" a call and collect the premium. If IBM goes
> down the call becomes less valuable, but you as the seller keep the premium.
> The amount you make is limited to the amount you collect at the sale but the
> risk is UNLIMITED, since if IBM goes up you would be responsible for the
> difference between the strike price and the higher stock price.
>
> It is very important that you thoroughly understand options before
> you attempt to trade them. There are many books about them. I recommend
> you start with one of the ones by Lawrence MacMillan.
>
> Good luck
> and good trading,
> Ray
> Raffurty
>
> -----Original Message-----
> From: jawad <jawad777@xxxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Date: Sunday, February 14, 1999 3:17 PM
> Subject: Options: How to place orders?
>
> >I would like to know what each of these choices in placing an order
> >for a put or call means.
> >
> >Buy open-
> >Sell open-
> >Buy close-
> >Sell close-
> >
> >Thanks,
> >Jawad
> >
> >P.S. I found out what my trading system was called. It was bottom
> >fishing. It is not that easy to make money i have also learned. I am
> >down to about 16,000. Mostly because of SMTK in which i lost all of
> >my money. Well, i guess that's just the way the ball bounces.
> >
> >
> >
> >_________________________________________________________
> >DO YOU YAHOO!?
> >Get your free @yahoo.com address at http://mail.yahoo.com
> >
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