Now everyone wants to have an extra dollar or two in their pockets

Now everyone wants to have an extra dollar or two in their pockets

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-Now everyone wants to have an extra dollar or two in their pockets. Well one dollar could possible make someone millions. -Has everyone heard the phrase “skies the limit” well in the stock market the sky is the limit. -one way to make money in the stock market is by call options. -a call option is a financial contract between two parties where the buyer has the right but not an obligation to buy an agreed quantity of a particular stock at a certain price during a certain time period. - For example, if Apple had a stock price of $50 and you think the stock price is going up but your not 100% certain. You can buy a call option for only 100 shares at 1 dollar a share at a price of $60 for 6 months. So what you’re saying is that if the price of Apple goes up to 65 or 70 or anything higher you have the right to buy the stock at 60 dollars a share within 6 months.
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Unformatted text preview: Which you make the difference in profit. So for demonstration purposes, if it went from 50 to 70 and you choose you buy it at 60 you made 9 dollars per share for 100 shares. A profit of 900 dollars!- Now not every stock will do this so if the stock were to go from 50 to 45 during the first 6 months you wouldnt choose to buy the stock at 60 dollars. So you are out 100 dollars for the contract. That is better than if you bought the stock at 50 and it when down to 45 you would loose 5 dollars a share which is a 500 dollar lose for a hundred shares. -So that one dollar on your desk could possibly make you 900 dollars or a million dollars. -The possibilities are endless with a little research and a few dollars. Start investing today and make a some extra dollars for your weekend beer....
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This note was uploaded on 11/15/2009 for the course ENG 401 taught by Professor Mess during the Spring '09 term at Northwood University, Michigan Campus.

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