I’m Steve Ember with the VOA Special English Economics
Report.
Stock options are a way to
profit from changes in the price of a stock without the need to buy the shares
immediately. Stock options are agreements to trade shares of a stock at a set
price by a set date.
An option comes with a strike price . This is the
agreed price at which the stock will be traded. Options also have an expiration
date. After that date the agreement is cancelled.
An option holder buys a contract. It can be a contract to purchase or a
contract to sell shares of a stock in the future.
Option holders commonly buy contracts to protect the value of a stock
investment. Say an investor has recently bought stock at ten dollars a share.
The investor worries that the price will drop in the next three months.
To protect that investment, the investor can buy an option to sell the shares
at ten dollars each.
That way, if the stock price drops to five dollars, the investor can exercise
the option and sell the shares at ten dollars. The investor loses only the cost
of the option contract. But the option has served as the insurance against a
loss.
What would have happened had the price of the stock gone up? Say it jumps to
fifteen dollars. The option gives the holder the right to sell at ten, but now
that is below the market price.
In this case the investor would not exercise the option. The contract expires
and becomes worthless. But who cares? The stock is now worth fifty percent more
than what it was.
Some investors buy options because they think a stock price will rise. An
option to buy a stock at today’s price could be valuable if the price goes up
before the option expires.
So far we have heard about option holders. Option writers are the ones who
sell the contracts on exchanges. The price paid is called a premium. It usually
represents the difference between the strike price and the market price of the
stock.
Options trading is organized by a clearinghouse .
A clearinghouse settles trades between holders and writers and credits profits
or losses. The biggest clearinghouse is the Options Clearing Corporation in the
United States.
Next week, we will discuss why stock options are in the news and how they
will affect American business earnings this year.
This VOA Special English Economics Report was written by Mario Ritter. Read
and listen to our reports at voaspecialenglish.com. And to send us e-mail, write
to special@voanews.com. I'm Steve Ember.
stock
option : 在指定時期內定價定額購股權
strike price
: 履約價格
clearinghouse :
票據交易所
