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Chapter 20 – What Determines the Values of Options?

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Options are exciting to see how they offer some great ways for you to make money from stocks. You’ll have a great chance to predict what you feel will happen as the stock you are interested in moves. In fact, this is ideal for both up and down markets.

Are you worried about market struggling for whatever reason? You can always trade put options when you notice that the market is down. Call options are great for other times in the year when the market is a little more optimistic and is moving forward.

As you look at options, you have to be aware of the call and put prices. Unlike a short sale, you do not have control over what the price of a stock will be. You’ve got to work with whatever your broker provides you. (The fact that individual brokers have their own rules about option margins only makes things more complicated.) Understanding what might determine the values of options will help you to get an idea of what the market is like and if there are particular trends that you need to be aware of.