Placeholder Image

字幕列表 影片播放

  • CALL OPTIONS TRADING FOR BEGINNERS IN 9 MIN. – PUT AND CALL OPTIONS EXPLAINED

  • Hello and welcome once again to MBABULLSHIT.COM. Our topic for this video isUnderstanding

  • Call Options”. Remember that you can always go back to MBABULLSHIT.COM. Let’s get down to it!

  • In order to first understandcall options”, I’d like to start with a story. Let’s

  • say there was a man who was interested in a share of stock. The stock is now worth $100

  • in the market and he might want to buy it in the next 5 years for also $100. However,

  • he’s afraid that it might be more expensive in the future and might cost him more than

  • $100. So what should he do? Suddenly he remembers that he knows a rich

  • lady and that he can pay her $1 to make a contract with her. In the contract, she guarantees

  • that she will sell him the stock for only $100 any time in the next 5 years if she wants.

  • He’s not forced to do it, but he can do it if he wants to do it. They write that agreement

  • down in this contract. She guarantees that she will sell him the stock for only $100

  • even if the stock price goes up to $200 or $300.

  • Let’s say that this man is allowed to sell this contract to somebody else who can use

  • it. Maybe he changes his mind and he doesn’t want this contract anymore. He doesn’t need

  • this contract anymore. Maybe he can sell it to somebody else like to me.

  • Question: What is this contract now called? It is called anOptioncontract.

  • This man now has the choice, the right, or the option to buy this stock from her for

  • the next 5 years for $100 even if the price goes up. Specifically, this contract is called

  • a “call option”. It is the man’s option to buy a share of stock at a give price ($100)

  • for a certain amount of time. In our example, it’s 5 years. Now, the lady here is called

  • theissuerof the option. She earns $1 because the guy paid her $1 in order to

  • motivate her to agree to the contract; but she also bears the risk in exchange for the

  • $1. This is very important. Don’t be confused

  • with the buying and selling of the option contract, which was what happened right now,

  • versus the buying and selling of the stock, which is possible in the future if the man

  • wants to use the contract. Don’t confuse those 2 things.

  • Another thing, when I said that the man might use the option contract to buy a share of

  • stock, in MBABULLSHIT language, we sayexercisethe option. So if an MBABULSHITTER says, “Oh!

  • I exercise my option!” he sounds so intelligent or whatever with all that bullshit. He’s

  • just saying that he used the option contract to buy a share of stock, or to sell it, depending

  • on what kind of option it is. More on that later. If you use or take advantage of the

  • option contract, then that means you exercised the option contract.

  • If the option is good for 5 years, then we can say that the date at the end of the 5

  • years is called theexpiration date”. It’s a the carton of milk, or food that

  • expires. So we say that the option expires in 5 years.

  • Very important. I said that this man can use or can exercise the option any time in 5 years,

  • but actually in Europe, it’s a special case. In Europe, you cannot use it any time in the

  • next 5 years or before its expiration date. In Europe, you must exercise or use the option

  • only on the expiration date itself. Be very clear about that.

  • The other thing is we kept on talking about $100 that the man might buy the stock from

  • the lady. This $100 is called thestrikeprice in MBABULLSHIT language. Don’t’

  • confuse that withoptionprice, which is simply the $1 that he paid the lady in

  • order for the lady to agree to the option contract with him.

  • Lastly, take note that in real life, the man and the woman (the old lady) do not deal directly.

  • Instead, options are traded in what we call theoptions exchange”. Remember that.

  • Now that you understand that, youre ready for our next video onPut Options”. If

  • you haven’t watched that video, please watch it. If youve already watched both videos

  • Put Options and Call Options (this video) – then youre ready for the next easy

  • videoValuing Options at Expiration Date,” which answers the questionHow much is

  • an option worth at Expiration Date?” You can watch that at MBABULLSHIT.COM.

  • Hope you learned something! Please share it if you like it. On Facebook, we are facebook.com/mbabullshit.

  • Same with Twitter. Have a great day and goodbye!

CALL OPTIONS TRADING FOR BEGINNERS IN 9 MIN. – PUT AND CALL OPTIONS EXPLAINED

字幕與單字

單字即點即查 點擊單字可以查詢單字解釋

A2 初級

看漲期權交易的初學者在9分鐘。 (Call Options Trading for Beginners in 9 min. - Put and Call Options Explained)

  • 65 12
    Alec 發佈於 2021 年 01 月 14 日
影片單字