How should I research a stock option? and Stock Texture

How should I research a stock option?

Options are more affordable for me. Is it the same as researching a stock for a company by looking what the company sells, market cap, institutional owners, and stock price history? Should I stick with IPO's or brand companys?


Stock best answer:

Answer by Eugene L
It's important to remember that options have a limited lifetime, and if the stock price does not exceed the exercise price you lose everything, whereas with buying the underlying stock, you'll still come out with something. You can still lose money if the stock price does not exceed the exercise price plus the premium you paid for the option plus commission.

Because of this, researching a stock option will only be similar to researching a stock for the purpose of SHORT TERM gains, so some information like what the company sells is less relevant, than if you were researching to invest in the LONG - TERM. So the usefulness of information, really depends on what or how you were going to use that information.

You also need to consider:
interest rate movements
time until option expires
and volatility

all these things can affect the value of the option "premium" (price someone is willing to pay for an option)

Stock

Stock Texture


Image by rubyblossom.
****Please feel free to use this Texture in your Artwork, if you do use it i would love it if you would please post your work in my group here****
www.flickr.com/groups/1296873@N23/
Thank you ***

Do not re-distribute in ANY WAY ~

Brushes by~
pinkonhead.com/

---

Orignal From: How should I research a stock option? and Stock Texture