July 12, 2011
when i buy an option contract that controls 100 shares of stock?
Tracy Rollins asked:
im want to trade the S&P 500 option with etrade. $9.99 commission plus 75 cents a contract.
if i bought CBOE S&P 500 INDEX S&P 500 JUN-11 $1360.00 CALL at $16.90 at 243pm est..how far would $300 take me
im want to trade the S&P 500 option with etrade. $9.99 commission plus 75 cents a contract.
if i bought CBOE S&P 500 INDEX S&P 500 JUN-11 $1360.00 CALL at $16.90 at 243pm est..how far would $300 take me
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Comments on when i buy an option contract that controls 100 shares of stock? »
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A contract that costs $16.90 would cost you $1690 + the rip off commissions from E*Trade (my broker charges me $1.25 per contract with no other charges).
You need to read several books on Options before you attempt this.
Yes, take the options price and multiply by 100 to see how much it will cost you.
Your example: 1 contract at 16.90 would cost $1690 (100*16.90 = $1690).
Etrade does have horrible commissions on stocks and options. I use the broker Real Fast Trader, they only charge $1 per option contract with no ticket fees.
If you are bullish, look for an ETF with 3x leverage. I am bearish for July – I would study VXX or BXDD. The phony money program called QE2 (Quantitative Easing #2) will end around June. We’ll have the worst of both worlds – high fuel prices without fiat money to pay for it.
You don’t have to buy 100 shares. You can buy “odd lots” such as 6 or 23.