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What is option “premium”? The premium is the price at which an option trades, and is paid by the buyer to the writer (seller) of the contract. The premium paid by the buyer is non-refundable payment for the rights inherent in the long contract. The writer (seller) of an option contract keeps the premium received, […]
... written on Nov 06 2006What does it mean to be exercised or assigned on an option transaction?When you buy an option you have the right to either purchase or sell stock at a predetermined price. When and if you choose to purchase or sell stock at that predetermined price you are said to be “exercising your right”. When you […]
... written on Nov 06 2006What is the contract size of an equity option?The contract size of an option refers to the amount of the underlying asset covered by the options contract. One option is equal to 100 shares unless adjusted for a special event, such as a stock split or a stock dividend. What is open interest?Open interest refers […]
... written on Nov 06 2006Loss-making Sugar Bun Corporation Bhd (SUGAR : stockcode 7036), which was queried by Bursa Malaysia on Oct 30 following the recent surge in the prices of its securities today tumbled by almost 30% (dropped by RM 0.88) from last Friday’s closing of RM 2.94 to RM 2.06 at lunch-hour closing wiping out almost RM 96 […]
... written on Nov 06 2006Chicago Board of TradeIn the late 1960s, as exchange volume for commodities began to shrink, the Chicago Board of Trade (CBOT) explored opportunities for diversification into the options market. Joseph W. Sullivan, Vice President of Planning for the CBOT, studied the over-the-counter option market and concluded that two key ingredients for success were missing. First, […]
... written on Nov 05 2006Ancient OriginsAlthough it isn’t known exactly when the first option contract traded, it is known that the Romans and Phoenicians used similar contracts in shipping. There is also evidence that Thales, a mathematician and philosopher in ancient Greece used options to secure a low price for olive presses in advance of the harvest. Thales had […]
... written on Nov 05 2006While option trading is being seen and treated as something which is rare like Dinosaur in Malaysia (Singapore has been mooting this option trading for quite sometime but have still to set a concrete plan to introduce it), it was started in United States since April 26, 1973 with the establishment of Chicago Board Options […]
... written on Nov 05 2006You’ve been working from Monday to Friday. After squeezing your brain-cells for the last 5 days to enrich your boss, you need to rest & relax. Or after days of intense trading the equity/stocks market, you made some profits, or loss. Or it’s payday and you need to spend away your money. Either way, you […]
... written on Nov 05 2006Remember this mantra for selling : “Bulls make money and bears make money, but pigs get slaughtered.” Sell early to lock in gains. It’s better to leave money on the table than to get out late. When a stock goes up 20% or more in the first three weeks after a breakout, you should hold […]
... written on Nov 04 2006U.S. stocks fell on Friday, with the Dow posting its longest losing streak in more than a year, as jobs data showing strength in the economy raised worries the Federal Reserve may need to resume raising interest rates. The Dow closed below 12,000 for the first time since October 18. A jump in oil prices […]
... written on Nov 04 2006
