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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