Ok I have read and read and read and still don't understand what an option is.

T

TheFoot

I must be fumb because I have read and reread what an option is.

Can someone break it down in layman terms what is the difference between trades, options, and futures?
 
Every master was a fool once.


This forum has both.
Stick around for a year or two and you might remember this day, with a big smile on your face.
(Like me, when bombarded broker, on why equity sim doesn't work,...on saturday)
 
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Option is basically a contract given to you by broker where you have the right to buy or sell them with the expiration date. Maybe this can help you understand better.
 
TheFoot said:
I must be fumb
More...

Is it a new word for fun and dumb ?
That’s so fumby.

You can’t get Options in one weekend.
Not sure what you’ve read neither...

You may want to read this book to begin with.
Also ... Paper practice, tinker, experiment.

You can also have a look here.
It’s the CME Group’s education portal.
 
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TheFoot said:
I must be fumb because I have read and reread what an option is.

Can someone break it down in layman terms what is the difference between trades, options, and futures?
More...

You put this thread in the forum Announcement section for sponsors info. :D

Simply, there's a section further below for Options @ https://www.elitetrader.com/et/forums/options.12/ :rolleyes:

Yet, don't worry...a moderator or Baron (forum owner) will eventually move it for you to the Options section.

wrbtrader
 
TheFoot said:
Can someone break it down in layman terms what is the difference between trades, options,
More...

Hey, let's stick to options first, shall we?

I will explain it to you like you are 5:

Options are like insurance contracts. Let's say you buy life insurance, paid for a year (term limit of contract) and in case of your early demise, your wife gets 100K. You pay for it monthly, let's say 40 bucks. So your investment is 480, and your wife's potential gain is 100K and a dead husband. Pretty good deal for most wives...

The only difference with options that there are a bunch of different expiration dates (not just one year) and you can also be the seller (thus you can play an insurance agent). In case you are the seller, you collect the premium if the client is still alive at the end of the term limit/expiration date.

That is about it in a nutshell.
 
Step up to the plate and and answer the OP's question what is the difference between an options contract and a futures contract.:D
 
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