The Associated

Difference between actions and options: the options are instruments that you can buy and sell like stocks, but the advantage of options is that the risk is considerably decreases in terms of invested capital, since in the case of the only options I pay a premium, do not pay the total value of the shares, this allows us to diversify even though we have a small portfolio, and the utility’s earnings potential is greater in the options, if the price of the associated action moves in our favor, either to the upside (options calls) or to the baja(opciones Puts). Another difference is that the options have a limited validity, instead the actions we can have in our power all the time that you want, in options is completely different since they always have an expiration date, and if we do not exercise the options or sell them at a given time, we can lose 100% of our money invested. Because it is good investing in options on actions as more interesting for investors in terms of profits, in the case of whether the market is rising is to buy only contracts call waiting for the associated action to raise and sell contracts calls more expensive, this will allow us to leverage the money that I want to say this, that we will have a higher return by purchasing the option of an actionthat buying the action if the transaction moves in our favor. Suppose that the action of a company is $20 and buy 100 shares, bone that I invested $2,000 in the actions of that company, a month the shares are worth $22 bone that they worth 10% more, if I sell them at that moment I will win $ 200, 10%, on the other hand if the same $2,000 would have invested them in options calls that give me the right to buy shares in that company at $20regardless of what this action in the market, when the action worth $22 I’m going to be winning much more than 10% with the contracts of options calls, could earn a 40% or 50% with this transaction, then with my investment of $2,000 instead of winning $200, could be gaining $800 or 1000 dollars with the same amount of money.

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