New York NY USA
Experience: Intermediate
Platform: esignal, thinkorswim,
Trading: Stocks
Posts: 122 since Oct 2012
Thanks Given: 63
Thanks Received: 35
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I know there are a lot more complicated things but here. is a basic beginner question about options.
Thanks for any replies.
AMZN is trading at about 310.
If I were buying the stock I would place my stop around 290 which seems to be about where support is.
Thats $20 per share risk. 20 X 100 is $2000. $2000 is my risk for buying 100 shares excluding comissions.
The January 2 310 call is $11
$11 x 100 is $ 1100 This is my total risk in buying 1 call contract.
So it would appear that buying the call is 1/2 the risk of buying the stock. Of course we understand that we could hold the stock and options expire. I am assuming the stock buyer would just exit a losing position at around the same time as experaton.
Is that basically correct? I know it is pretty basic. But one step at a time. I'll get to straddles and other jazz in time.
Thanks for replies
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