Newbie option question

Discussion in 'Options' started by failed_trad3r, Mar 26, 2010.

  1. This site says if you have stock at $40, and buy option at 1,46, breakeven is 41,46.

    Is that true?

    Well as an option newbie i thought isnt an option worth 100 shares not 1 share? Also what about the option commission which is usually $1-2?

    AM I right?:confused:
  2. Options are often quoted as though they are one - i.e. saying 1.46 means $146 or one hundred fourty-six dollars.

    So, if the stock goes to 41.46, the option will be worth $146 at expiration, thus breakeven.

    Also, many people don't include commission costs in their examples (which is good IMO) because commissions can vary and certainly can make examples harder to understand.

  3. ah i see.. that makes things alot clearer now, thanks!!:) i thought something was different
  4. tampung


    good u understand now that what i said this forum very usefull for us
  5. pikkpakk


    hello all,

    i'm not trading frequently options. i have this problem:

    i wanted to put a buy and a sell option order on a stock put market.

    i'm not allowed to post orders on both side, why?

    another problem: it's a low strike price, total value: 170usd buying, 185 usd selling, commission: 8usd isn't it too much, is there a less expensive provider for options?

  6. MTE


    Only market makers have the privilege of making a two-sided market.

    $8 for 1 contract is very expensive, and yes, there are many brokers that offer a lower rate.