Sunday, January 19, 2014

Whats the difference between Stock and Stock Option? and Stock: New Year's Day Sitting Against the Duboce Park Tree, San Francisco

Whats the difference between Stock and Stock Option?



I was wondering this because it says the Flat Rate for stocks is $ 3.95

However...

Options are $ 1 per contract over 5

What does this mean?


Stock best answer:

Answer by Sion J
A stock option is simply the cost to have the option to purchase the stock.So you may have the option to purchase 100 shares of Citigroup for $ 50.00 at $ 3.00/ share. You can choose to never excercise you option and lose just the $ 50.00 instead of having invest into Citigroup and hoping that the share price would increase to $ 7.00. Therefore you're limitling your liability should the stock price go down instead of up People use stock options to hedge and many DO NOT make money using options only.

A stock is obviously a share of the company.


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Stock: New Year's Day Sitting Against the Duboce Park Tree, San Francisco
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Image by Lynn Friedman



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