The Motley Fool Discussion Boards
Learning to Invest / Investing Beginners
|Subject: Re: Re: terminology||Date: 11/6/2012 9:00 AM|
|Author: JustMee01||Number: 26255 of 28039|
Options are a little confusing at first. They've sold January puts on Startbucks, with a strike price of $47.
A "put" is an options contract that allows the buyer to forcibly sell 100 shares of the underlying stock.
The seller of the put will receive those shares (and pay for them of course @ the strike price), if the contract is exercised.
In exchange for that risk, the put seller receives a small payment, that's paid by the buyer.
That $47 is the strike price (the price at which the contract executes). Above the strike, there won't be