Introduction
When talking about ordinary stock options, we mean a contract which conveys to its holder the right to buy or sell shares of the underlying security at a specified price on the date or before the given date. This right, which is also not an obligation, is granted to the seller of the option.
Types of options
The types of options are of two kinds; calls and puts. While a call option gives the holder the right to buy an underlying security, a puts option conveys the right to sell an underlying security. An underlying security on the other hand is a specific stock on which an option contract is based. Options are further categorized into derivative securities . This is because their value is derived in part from the value and characteristics of the underlying security. The number of shares of the underlying stock, represented by the option, is the unit of trade. There is also the strike price which is also referred to as the exercise price. This is the specified share price of an option which the shares of stock can be either bought or sold by the holder or buyer of the option contract if he exercises his right against the seller of the option. Its price is set close to the current share price of the underlying security. If the strike price of a call option is less than the current market price of the underlying security, then the holder of this call has the right to buy the stock at a price that is less than the price he would have to pay to buy the stock at a price that is less than the price he would have to pay to buy the stock in the stock market.
Trading istock
In today’s world, the globe is connected on the internet. As far as stock options as well as trading is concerned, this can also be done over the internet. There are certain websites which allow you to do this. There is the sharespost.com as well as secondmarket.com which are private stock exchanges for members of private companies who want to sell some of their shares before going public. These exchanges have the benefit of giving stakeholders an optional way to trade their shares in hot startups such as facebook without having to wait for an IPO for year on end. As far as i stock options are concerned, some employers give their employees these when they cannot raise their salaries. The i stock acts as a way of compensation.
How to become part of it
When you want to participate in the i stock market, you will need to do your research on the trends of this particular kind of stock. Before buying options, it is important to weigh your options. If you want to buy istock options before they go public, it is important to have a sense of assurance and confidence in your investment. What is the future of the i stock? It is likely to be profitable in future?
Another thing that you can do is to register with private i stock exchanges. Create a profile in which you will be able to see how much other people in it have paid for shares of twitter as well as other privately owned stock. You may also be provided with a report of the company and its current value. You will however, not be able to sell your shares up until the company goes public.
