AAPL "bargain bin" 8) interesting ... The link above does give some pretty good reasons though why the stock is taking a beating. One thing they missed: Universal Binaries of Adobe|Macromedia ......!!!!
Is there an easy way to buy a small call option on Apple stocks?
In the use go to www.cboe.com. It has a nice tutorial on options. More directy answering your question, it is easy to purchase options through a full service boker such as Schwab. They do require that you apply for options purchasing privaledges.
Is there an easy way to buy a small call option on Apple stocks?
If I were you, I would strongly suggest doing a lot of reading into mechanics of options trading before you consider purchasing options. Some basic things to keep in mind:
- options that you purchase can expire worthless, and a very significant percentage of options expire unexercised in this manner
- all else being equal, the value of a long option will gradually decrease every day; there is a time component known as "Theta" to what compromises the value of an option
- options are a form of leverage, so capital invested in options is likely to be quite volatile compared to equities
- a long call option provides you with a fixed maximum loss and unlimited upside
...there is also a fair bit of work involved in determining which expiration month to purchase options for, determining if the options are reasonably priced, getting a sense of whether or not the option is likely to be "in the money" prior to expiration, etc.
The above said, options can be a very powerful tool, both for speculation purposes and hedging purposes. For example, if a stock is optionable, it can be argued that purchasing puts is a better strategy than shorting the underlying stock (due to lower risk).
......a long call option provides you with a fixed maximum loss and unlimited upside....
am i right to suggest that this is generally the case for AAPL -- most of us agree there should be some good upside to AAPL $80 - $100 ?? over the next 1-2 years. but one should just cover one's ass by dumping the stock if it drops below, say, $45.
but i am confused. what is the difference between a long call option and just calling your broker and saying, look, it drops below $45 you better sell sell sell....
needless to say i am a complete amateur when it comes to stocks
......a long call option provides you with a fixed maximum loss and unlimited upside....
am i right to suggest that this is generally the case for AAPL -- most of us agree there should be some good upside to AAPL $80 - $100 ?? over the next 1-2 years. but one should just cover one's ass by dumping the stock if it drops below, say, $45.
Exactly what I thought.
Quote:
Originally posted by sunilraman
[i]but i am confused. what is the difference between a long call option and just calling your broker and saying, look, it drops below $45 you better sell sell sell....
needless to say i am a complete amateur when it comes to stocks
Me too. But I would gladly pay a fee to have the option to buy AAPL at $65-70 6 month or so from now.
......a long call option provides you with a fixed maximum loss and unlimited upside....
am i right to suggest that this is generally the case for AAPL -- most of us agree there should be some good upside to AAPL $80 - $100 ?? over the next 1-2 years. but one should just cover one's ass by dumping the stock if it drops below, say, $45.
but i am confused. what is the difference between a long call option and just calling your broker and saying, look, it drops below $45 you better sell sell sell....
needless to say i am a complete amateur when it comes to stocks
www.cboe.com. Nice tutorial. I agree with Chagi, options are a tough nut to crack. I checked schwab and April call at strike of 75 is 12 dollars. therfore Apple needs to go past 87 for call to be worth anything.
Comments
Originally posted by sunilraman
$58.66 Lowest in a long time. WTF?
Ahem! BUY!!!
http://www.thestreet.com/_googlen/te...FREE&cm_ite=NA
Originally posted by Anders
Is there an easy way to buy a small call option on Apple stocks?
In the use go to www.cboe.com. It has a nice tutorial on options. More directy answering your question, it is easy to purchase options through a full service boker such as Schwab. They do require that you apply for options purchasing privaledges.
Originally posted by Anders
Is there an easy way to buy a small call option on Apple stocks?
If I were you, I would strongly suggest doing a lot of reading into mechanics of options trading before you consider purchasing options. Some basic things to keep in mind:
- options that you purchase can expire worthless, and a very significant percentage of options expire unexercised in this manner
- all else being equal, the value of a long option will gradually decrease every day; there is a time component known as "Theta" to what compromises the value of an option
- options are a form of leverage, so capital invested in options is likely to be quite volatile compared to equities
- a long call option provides you with a fixed maximum loss and unlimited upside
...there is also a fair bit of work involved in determining which expiration month to purchase options for, determining if the options are reasonably priced, getting a sense of whether or not the option is likely to be "in the money" prior to expiration, etc.
The above said, options can be a very powerful tool, both for speculation purposes and hedging purposes. For example, if a stock is optionable, it can be argued that purchasing puts is a better strategy than shorting the underlying stock (due to lower risk).
......a long call option provides you with a fixed maximum loss and unlimited upside....
am i right to suggest that this is generally the case for AAPL -- most of us agree there should be some good upside to AAPL $80 - $100 ?? over the next 1-2 years. but one should just cover one's ass by dumping the stock if it drops below, say, $45.
but i am confused. what is the difference between a long call option and just calling your broker and saying, look, it drops below $45 you better sell sell sell....
needless to say i am a complete amateur when it comes to stocks
Originally posted by sunilraman
Originally posted by Chagi
......a long call option provides you with a fixed maximum loss and unlimited upside....
am i right to suggest that this is generally the case for AAPL -- most of us agree there should be some good upside to AAPL $80 - $100 ?? over the next 1-2 years. but one should just cover one's ass by dumping the stock if it drops below, say, $45.
Exactly what I thought.
Originally posted by sunilraman
[i]but i am confused. what is the difference between a long call option and just calling your broker and saying, look, it drops below $45 you better sell sell sell....
needless to say i am a complete amateur when it comes to stocks
Me too. But I would gladly pay a fee to have the option to buy AAPL at $65-70 6 month or so from now.
And I would agree totally that the price now will seem a bargaiin at $60-$70.
I bought more at lows of late! I just couldn't let the bargain bin pass me by!
Originally posted by sunilraman
Originally posted by Chagi
......a long call option provides you with a fixed maximum loss and unlimited upside....
am i right to suggest that this is generally the case for AAPL -- most of us agree there should be some good upside to AAPL $80 - $100 ?? over the next 1-2 years. but one should just cover one's ass by dumping the stock if it drops below, say, $45.
but i am confused. what is the difference between a long call option and just calling your broker and saying, look, it drops below $45 you better sell sell sell....
needless to say i am a complete amateur when it comes to stocks
www.cboe.com. Nice tutorial. I agree with Chagi, options are a tough nut to crack. I checked schwab and April call at strike of 75 is 12 dollars. therfore Apple needs to go past 87 for call to be worth anything.