5 Facts About Stocks Options Trading!

While people talk about option trading, they actually refer to a number of different securities; options are generally traded on all types of securities like commodities, stocks, forex and many more. You need to be familiar with all the options before you choose one.

 Here are 5 facts that help you to have a clear idea about stocks options trading:
  • Most of you don’t have a clear idea about who actually creates stock options. Options Cleaning Corporations (OCC) issues all the listed options at the CBOE and other US option exchanges. It makes it sure that the market stays liquid and that there is always a buyer and seller for every transaction.
  • Sometimes you will find that it is not the option trader who buys or sells the stock options. Market Makers, the exchange members; by using their own money to buy or sell the options, keep the market liquid. So, while there is the absence of public to buy or sell orders, the Market Makers step in to ensure that trade can be executed.
  • The price options are quoted at their per share price. However, they are actually sold in 100 share batches. Thus, whatever price you see quoted has to be multiplied by 100 to get the true cost of the option.
  • Stock options don’t expire on the third Friday in the month of their expiration. They expire on the third Saturday. However, as the market remains closed on Saturday, people state that they expire on Friday.
  • When you buy a stock option, you’re not buying the ownership. Instead, you are buying a contract that provides you certain rights. With a Call option, you are buying the right to buy a stock while Put options provide you the right to sell a stock.
Stock options may seem confusing to you first. But, with learning, you are able to clear all your doubts. Would you like to learn more about this? Do you have any query? Then get the assistance from the experienced professionals of WVMTS Indicator. Unravel the facts by visiting their website at wvmtsindicator.com

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