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Buy put options on falling stocks. Put options rise in price when the underlying stock falls in price, and this basic option strategy gives the put owner the ability to multiply their money over ...
However, in October, two analysts recommended selling, six rated the stock a “buy” or “strong buy” and 11 rated it a “hold” (seven) or “underperform” (four).
An option is a contract giving an investor the right, but not the obligation, to buy or sell a stock or other asset at a set strike price by a certain expiration date. Investors pay an upfront fee ...
A trader who expects a stock's price to increase can buy a call option to purchase the stock at a fixed price (strike price) at a later date, rather than purchase the stock outright. The cash outlay on the option is the premium. The trader would have no obligation to buy the stock, but only has the right to do so on or before the expiration date.
The buyer of the call option has the right, but not the obligation, to buy an agreed quantity of a particular commodity or financial instrument (the underlying) from the seller of the option at or before a certain time (the expiration date) for a certain price (the strike price). This effectively gives the buyer a long position in the given ...
If the underlying stock's market price is below the option's strike price when expiration arrives, the option owner (buyer) can exercise the put option, forcing the writer to buy the underlying stock at the strike price. That allows the exerciser (buyer) to profit from the difference between the stock's market price and the option's strike price.
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