I am not an very aggressive investor. My target is make around 6 per cent profit every year. This is why HSBC comes into my eye balls. I brought HSBC at $60 and it can generate around 6% interest every year.I hope they can keep up. Besides, I also do short call to generate extra income(around 1%).
Beside HSBC, I also have CK Hutchison Holdings Limited which I brought at $70. I will sell this soon and I am going to short call this at a very close price.
2019年10月3日星期四
2019年9月28日星期六
What are options?
Options are financial instruments.
Options contracts provide the buyer right to buy or sell specific amount of stock at specific price before the contracts are expired. Normally, 100 shares of the stock will change hand if the contract is executed
Below is an example of a DAL options contract:
There are 2 kinds of options contract - CALL and PUT.
CALL options contract give the buyer right to buy the stock.
PUT options contract give the buyer right to sell the stock.
Investors can choose buying (LONG) or selling (SHORT) the above option contracts and so there are only four combination, i am going to use DAL as example:
LONG CALL:
Investors buy a call option contract at strike 59. When DAL rises over 59, investors have right to execute the contract to buy stock from the seller. The more the stock rises, the more money the investors gain.
SHORT CALL:
Investors sell a call option contract at strike 59. The investors would receive money from the buyer. When DAL rises over 59, the investors may execute the contract and the investors need to give the buyer stock.
LONG PUT:
Investors buy a put option contract at strike 59. When DAL drops below 59, investors have right to execute the contract to sell stock to the buyer. The more the stock drops, the more money the investors make.
SHORT PUT:
Investors sell a call put contract at strike 59. The investors would receive money from the buyer. When DAL drops below 59, the investors may execute the contract and the investors need to buy the seller stock at target price.
This is basic rule of options, in next passage, I am going to introduce options more deeply.
Options is a good thing, it can add 2-3% additional value to portfolio if it is used wisely.
Options contracts provide the buyer right to buy or sell specific amount of stock at specific price before the contracts are expired. Normally, 100 shares of the stock will change hand if the contract is executed
Below is an example of a DAL options contract:
There are 2 kinds of options contract - CALL and PUT.
CALL options contract give the buyer right to buy the stock.
PUT options contract give the buyer right to sell the stock.
Investors can choose buying (LONG) or selling (SHORT) the above option contracts and so there are only four combination, i am going to use DAL as example:
LONG CALL:
Investors buy a call option contract at strike 59. When DAL rises over 59, investors have right to execute the contract to buy stock from the seller. The more the stock rises, the more money the investors gain.
SHORT CALL:
Investors sell a call option contract at strike 59. The investors would receive money from the buyer. When DAL rises over 59, the investors may execute the contract and the investors need to give the buyer stock.
LONG PUT:
Investors buy a put option contract at strike 59. When DAL drops below 59, investors have right to execute the contract to sell stock to the buyer. The more the stock drops, the more money the investors make.
SHORT PUT:
Investors sell a call put contract at strike 59. The investors would receive money from the buyer. When DAL drops below 59, the investors may execute the contract and the investors need to buy the seller stock at target price.
This is basic rule of options, in next passage, I am going to introduce options more deeply.
Options is a good thing, it can add 2-3% additional value to portfolio if it is used wisely.
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