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Strategies & Market Trends : Trader J's Inner Circle
NVDA 182.35-0.6%Dec 5 9:30 AM EST

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To: MMK who wrote (8237)2/8/1999 11:25:00 PM
From: Triffin  Read Replies (1) of 56535
 
MMK...options

I didn't really answer your question..
but do get the McMillian book if this
is something you want to add to your arsenal..

Options are a 'leveraged' instrument and are
in two categories.. a 'call' and a 'put'
a 'call' option conveys the right to acquire
an underlying asset ( in this case 100 shs
of NAVR ) at a 'set' price for a 'set' period of
time..The 'value' of an option is a function of
the following variables..the volatility of the
underlying instrument..time to expiration..the
time value of money..wether the option is 'in the
money' or not .. The final value of a 'call' option
depends on wether or not the price of the
underlying stock is above or below the 'set'
or 'strike price' at the time of expiration..
a NVAR feb 20 call will be worth 2.00 on
expiration if NAVR is @ 22.00 on expiration..
if NAVR is at any price less than 20.00 on
Feb expiration then the feb 20 call will
'expire' worthless..bad for the buyer..good
for the seller.


A 'put' option is the opposite of a call
and conveys the right to 'sell' 100 shs
of stock at a 'set' price for a 'set'
period of time..

There are listed put and call options for
well over 1,000 popular common stocks
as well as other instruments..but that's
for after McMillian..<gg>

Jim in CT..
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