What Did You Buy Today?

[fenders53]

(04-04-2020, 11:46 AM)DividendGarden Wrote:

(04-03-2020, 02:39 PM)stockguru Wrote: Question about PUTS

Was thinking of buying PUTS in XOM. $37 strike price

I never bought options in my life lol. How does this worK?

I would like to buy XOM at $37. So looks like the 5/1 is going for $6.00

So my cost would be 100 x $6.00 = $600 correct?

And if the stock were to trade below $37 I would be in the money?  If it goes under $37 before the expiration can I still sell for a profit?

What is a buy open, or sell open??

How do I profit from puts ??

Sorry I'm a rookie lol

You definitely will want to learn more about them and "paper trade" them before putting actual money at risk.  I use options very sparingly, maybe 2x per year.

I agree with that with only one caveat.  Unlike paper trades, there are spreads involved with options and you have to experience what order price you may actually be able to execute.  A volume of trades is how you will learn.  If you place a $100 bet and find yourself up 50% up the next day, maybe ring the register and move on.  The reality is you have to get your nose bloodied a couple times to understand the risk reward.  Very few have the stomach to not panic and close out when a trade goes against them for a half a day.  You gotta know your personal risk tolerance.  Options definitely aren't for everyone, but they treat me very well as long as I don't use them for gambling purposes very often.  It doesn't always work out but I steal the gamblers lunch money over time.  After 700 trades I'm confident enough it's true.  I'd be broke in a hurry if I was wrong about that.