I previously attended a 2-hour seminar on Options Trading conducted by an experienced options trader. Very interesting. I've heard of how $ can be made quite "easily". So naturally, I was keen to read more about this. It just seemed so easy spending about 30 minutes a day after knocking off from work just seems too good to be true. There were a lot of participants and the testimonials from past participants were very convincing.
Prior to this 2- hour seminar, I've also attended another
money making 4-day course, conducted by Adam Khoo Learning Technology Pte Ltd. Though the course is very inspiring and an eye opener, unfortunately, I have yet to put what I've learned into practice. I would need to attend the refresher course at some stage soon so I can at least recover some of the course fee.
The course fees for these money making courses are in multiples of 1K! So I must really focus on my financial goals in order to recover the course fees!
Anyway, after attending the seminar and the the course on Options, I felt that I needed to understand Options much more so I searched the net for more information on Options and came across so many articles on Options! I suppose the most basic thing to do is to understand the basic terms for Options and hopefully I can really trade profitably. I remembered one of the trainers in a self development course that I took said that unless you are properly trained in a particular field, there will always be risks.
Options Trading can help manage risk and can be profitable though a good foundation knowledge is essential in order to benefit from them. What I did was I googled the terms and further educate myself on these terms. Knowledge is very important as the more I know the better off I will be with less chance of losing money!
Anyway, Options are derivatives of something. This means an option gains its value from some underlying instrument ie stocks, commodities, futures contracts, foreign currencies or stock indexes. So the options contracts would base its value on the values of whatever instrument you want to trade.
Generally an option is a contract between a buyer and a seller. In a contract both parties have to agree upon certain things. One of the first things that the two parties need to agree upon is the price. In an options contract, the underlying instrument is bought or sold if the options is exercised. So the buyer of the options contract reserves the right to purchase or sell the underlying instrument for a specified price or strike price.
Option has an expiry date. It expires on the 3rd Friday of every month and if Option is not exercised by then, it will become worthless. So what happens if it's a public holiday on Friday? Options will then expire the day before the holiday. BTW, these holidays are based on US holidays.
