Key Points an Option Trading Seminar Won’t Cover

  1. Call Options increase in value as the stock goes up.

  2. Put Options increase in value as the stock to goes down.

  3. Option contract represents 100 shares.

  4. The underlying security of an option can be a stock, a stock market index (Nasdaq, Amex, NYSE), futures contract.

  5. If the option is not used (exercised) before the expiration date it becomes worthless.

  6. Option holders do not have rights of stockholders – e.g., voting rights, regular cash or special dividends.

  7. Option’s expiration is the Saturday following the third Friday of each month.