Options- How do they work???
Do their pricings change throughout the day? Or are their pricings dependent on the last closing price for the day before? How often are option prices being adjusted???
Thank you much, I'm about to buy an option- so it's appreciated :)
The fact that you had to ask how they are priced suggests this may not be the best idea.
This is hilarious
As the great Shakespeare wrote in Hamlet, "To be or not to be, that is the question." A choice: To do or not to do. That, my friend, in its purest form, is an option.
lol. i wouldnt recommend you purchase any options if you just figured out the answer to this question. play around with a paper account first. and watch for the bid-ask spread, even liquid stock doesnt mean options are liquid. i would recommend you learn the basics of how time, underlying asset price and volatility affect the value of your option. dont fuck around with options cause they will most certainly put it in your butt. without consent.
pricing options = pricing volatility
that's all you need to know
magnets - how do they work?
Let's say there's a 72 ton bucket of shit in your house. It doesn't smell too bad right now but you know pretty soon it's gonna smell terrible and ruin your entire house. You have your friend come over and you pay him $5000 for the right to move the bucket to his house any time in the next month. He's okay with this because it doesn't smell too bad right now and he's not tall enough to see into the bucket and realize it's full of shit. Sure enough, a few days later the bucket starts to smell pretty fucking bad and you call up your buddy to make good on your agreement. Soon thereafter, the huge turd is airlifted to his home and you save yourself from any further pain to your olfactories.
This is called a "put"
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