Comments on: Entering an Order to Buy or Sell Options Investor Series, Part I http://www.stocktradingtogo.com/2009/04/15/entering-buy-sell-order-options-trading-investor-series-part-1/ Investing Online Made Easy Thu, 18 Mar 2010 20:35:23 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: Mark Wolfinger http://www.stocktradingtogo.com/2009/04/15/entering-buy-sell-order-options-trading-investor-series-part-1/comment-page-1/#comment-95305 Mark Wolfinger Fri, 26 Jun 2009 00:31:04 +0000 http://www.stocktradingtogo.com/?p=5234#comment-95305 An option contract represents the right to buy or sell 100 shares of stock. Yes. For the stock you mentioned, I cannot give you the price of '1 contract.' First, you did not specify the stock. That is a crucial piece of information. Next, there are at least 12 call options and 12 put options that trade - and quite possibly more than that. You would have to know which specific option you want to trade (I can see you want to buy the call option). There are options that expire in four different months. There are also options with at least three different strike prices. The strike price of a call option is the price at which the call owner has the right to buy stock. So if you want to know what the option will be worth when the stock is 28.5, I must know if you are buying the call with a strike of 22.5, 25, 27.5, or maybe 30. And even that is not enough information to give you the option price. When you buy or sell an option (either a put or call), there are many choices. And each of them has its own market: a bid price and an ask price. just like you buy stocks, you enter a bid price for the specific option you want to buy. One suggestion: Do not enter a market order. A limit order is much better. this is not difficult to understand, but you want to see the information presented to you in a clear, logical sequence. An option contract represents the right to buy or sell 100 shares of stock. Yes.

For the stock you mentioned, I cannot give you the price of ‘1 contract.’ First, you did not specify the stock. That is a crucial piece of information.

Next, there are at least 12 call options and 12 put options that trade – and quite possibly more than that. You would have to know which specific option you want to trade (I can see you want to buy the call option).

There are options that expire in four different months. There are also options with at least three different strike prices. The strike price of a call option is the price at which the call owner has the right to buy stock. So if you want to know what the option will be worth when the stock is 28.5, I must know if you are buying the call with a strike of 22.5, 25, 27.5, or maybe 30. And even that is not enough information to give you the option price.

When you buy or sell an option (either a put or call), there are many choices. And each of them has its own market: a bid price and an ask price. just like you buy stocks, you enter a bid price for the specific option you want to buy.

One suggestion: Do not enter a market order. A limit order is much better.

this is not difficult to understand, but you want to see the information presented to you in a clear, logical sequence.

]]> By: lee e. anderon http://www.stocktradingtogo.com/2009/04/15/entering-buy-sell-order-options-trading-investor-series-part-1/comment-page-1/#comment-95299 lee e. anderon Thu, 25 Jun 2009 22:58:43 +0000 http://www.stocktradingtogo.com/?p=5234#comment-95299 a contract of 1 is a 100 share? how much does 1 contract cost if the stock trade for $25.00. What would be the profit if the stock rose to $28.50 by the thrid friday of the next month. a contract of 1 is a 100 share? how much does 1 contract cost if the stock trade for $25.00. What would be the profit if the stock rose to $28.50 by the thrid friday of the next month.

]]>