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Last post 05-12-2008, 10:03 AM by SeanK. 2 replies.
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  •  05-11-2008, 8:14 PM 28901

    Very new to options! Is this price for 1 or 100 shares??!?

    Reply Quote
    Hello, I'm very new to this and have a question about options trading.

    I think I understand the basics, but I'm confused about the number of shares we are talking about for the prices given.

    For example, looking at Apple Inc. call options expiring in Jul 2008, there is one sym: APVGQ with a strike price of $185.  It says it's at $12.20. 

    If I buy that at $12.20, do I have a contract for 100 shares or 1 share?  Or will I have to pay 100x that price ($1,220) to have the right to buy 100 shares at that price?

    Thanks for your help!

  •  05-11-2008, 8:27 PM 28902 in reply to 28901

    Re: Very new to options! Is this price for 1 or 100 shares??!?

    Reply Quote
    cubbiesx:
    Hello, I'm very new to this and have a question about options trading.

    I think I understand the basics, but I'm confused about the number of shares we are talking about for the prices given.

    For example, looking at Apple Inc. call options expiring in Jul 2008, there is one sym: APVGQ with a strike price of $185.  It says it's at $12.20. 

    If I buy that at $12.20, do I have a contract for 100 shares or 1 share?  Or will I have to pay 100x that price ($1,220) to have the right to buy 100 shares at that price?

    Thanks for your help!




    The basics:
    1 contract is for 100 shares (the minimum you can buy)
    For your case above APVGQ is trading at 12.20. Thats the premium for a single share. In order to buy 1 contract you would pay a 1220 premium for a right to buy apple at 185. So essentially you would want apple to get to 185 by July, and in order to break even you need it to reach 197.20

  •  05-12-2008, 10:03 AM 28924 in reply to 28901

    Re: Very new to options! Is this price for 1 or 100 shares??!?

    Reply Quote
    cubbiesx:
    Hello, I'm very new to this and have a question about options trading.

    I think I understand the basics, but I'm confused about the number of shares we are talking about for the prices given.

    For example, looking at Apple Inc. call options expiring in Jul 2008, there is one sym: APVGQ with a strike price of $185.  It says it's at $12.20. 

    If I buy that at $12.20, do I have a contract for 100 shares or 1 share?  Or will I have to pay 100x that price ($1,220) to have the right to buy 100 shares at that price?

    Thanks for your help!




    Be careful out there.  I don't want to discourage you from trading but trading options much more involved than just trading stocks.  It can be very profitable when done right but you can lose a lot of money fast when done wrong.  I suggest you read some books on the subject and when you do trade, keep your $$ amounts very small.  That way you will be able to recover when trades go against you.

    -Sean
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