Sentences with phrase «trade shares of the underlying stock»

If, however, you sell options calls or puts, you have the obligation to trade shares of the underlying stock.

Not exact matches

The share price tracks the price of gold, and it trades like a stock, but the vast majority of investors don't have a claim on the underlying gold.

When the stock is trading at $ 65, suppose you decide to purchase the 62 XYZ Company October put option contract (i.e. the underlying asset is XYZ Company stock, the exercise price is $ 62, and the expiration month is October) at $ 3 per contract (this is the option price, also known as the premium) for a total cost of $ 300 ($ 3 per contract multiplied by 100 shares that the option contract controls).

This is precisely what makes this kind of trade safer than simply purchasing shares of the underlying stock the «traditional» way.

If you're interested in day trading stock options for a living it's important to be aware the contracts are based on 100 shares of the underlying stock.

In other words, if I already like the underlying stock — and if I think it's already trading at a reasonable price — then if I'm «stuck» holding shares at expiration (April 24) then that's perfectly fine with me: I can simply collect the stock's growing dividend while waiting for a new opportunity to sell another round of covered calls.

Because ETFs trade on a stock exchange, there is the potential for price disparities to develop between the trading price of the ETF shares and the trading price of the underlying securities.

This is precisely what makes a «high - yield trade» safer than simply purchasing shares of the underlying stock the «traditional» way.

The second and third warrants (the «Contingent Warrants») are for 50,000 shares each of common stock, and become fully vested only if our underlying stock price achieves or exceeds $ 12.00 and $ 14.00 per share, respectively, for five consecutive trading days as quoted on Nasdaq, over a period of twenty - four months from the Grant Date.

I like the lower costs of the ETFs, but I have refrained from ETFs because I'm concerned that the share values may not always be aligned with the value of the underlying assets (because the ETFs can be traded like stocks all day long).

And because you're collecting immediate income when you open the trade, you're lowering your cost basis on the shares you're buying, which means this strategy is actually safer than purchasing shares of the underlying stock outright.

In other words, if I already like the underlying stock — and if I think it's already trading at a reasonable price — then if I'm «stuck» holding shares at expiration (May 15) then that's perfectly fine with me: I'll simply collect a growing dividend while waiting for a new opportunity to sell another round of covered calls.

Place a trade using your brokers option trading screen to buy one of the selected put options for each 100 shares of the underlying stock you own.

Contract — 1) the unit of trading for a particular futures contract (e.g., one contract may be 100 shares of the underlying security), 2) the type of future being traded (e.g., futures on ABC stock).

An ETF that holds underlying stocks in companies such as Intel, JP Morgan Chase, and UnitedHealthGroup among others would be highly liquid because these stocks trade millions of shares each day.

That's what makes this trade safer than simply purchasing shares of the underlying stock the «traditional» way.