Stocks & Commodities V. 27:01 (61): Explore Your Options by Tom Gentile

Stocks & Commodities V. 27:01 (61): Explore Your Options by Tom Gentile
Item# \V27\C01\011EYO.PDF
Availability: In Stock

Product Description

Explore Your Options by Tom Gentile


I am trying to understand why I did not make any money on a put option. I am hoping you can shed some light. On October 23, 2008, I bought an Xyz put option with the 15 strike price. I bought two contracts at $2.10, or $420 total. The stock dropped to near the strike price. I sold on November 11 for $1.95 and collected $390. I lost $30 even though the stock dropped the way I thought it would. How can this happen?

In order to answer your question, it is important that you understand that several factors will influence the value of a stock option, not just the stock price. Certainly, the price of the stock is often the most important. If I buy a call and the stock moves higher, chances are the call will increase in value. On the other hand, if I buy a put and the stock moves lower, the put will probably increase in value. Most traders understand this and, for that reason, many investors buy puts and calls as a leveraged or cheaper way to play moves in the stock.

*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at users can view the S&C Digital Edition in the subscriber's section on

Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order