Dortmund bus terrorist attack

Status
Not open for further replies.


Layman's terms
A put option means you pay a fee up front to give you the option to sell something at a pre agreed price at a point in future.

Let's say HSBC is trading at £6 a share.

I could buy a put option that gives me the right to sell it to you for £7 in 1 months time. Note it's the right to sell, but not an obligation. It's my choice

Now the chance of it being a £1 more expensive in a months time is low right? Let's say it's £6.50. I would therefore sell at £7 and take the £0.50 profit per share.

In this case the higher I set the level (7 in this case), the more I have to pay you for the option

Note: this is the basic concept of a put option. In the Dortmund case he was looking to buy the option to sell, but buy back at a lower price on the open market when the share price tanked
 
A put option means you pay a fee up front to give you the option to sell something at a pre agreed price at a point in future.

Let's say HSBC is trading at £6 a share.

I could buy a put option that gives me the right to sell it to you for £7 in 1 months time. Note it's the right to sell, but not an obligation. It's my choice

Now the chance of it being a £1 more expensive in a months time is low right? Let's say it's £6.50. I would therefore sell at £7 and take the £0.50 profit per share.

In this case the higher I set the level (7 in this case), the more I have to pay you for the option

Note: this is the basic concept of a put option. In the Dortmund case he was looking to buy the option to sell, but buy back at a lower price on the open market when the share price tanked
Got it all til the last paragraph ,he buys and sells pre crash then buys cheaper ones after? How has he made anything ? He can do either transaction pre and post crash independently, I don't get it
 
Got it all til the last paragraph ,he buys and sells pre crash then buys cheaper ones after? How has he made anything ? He can do either transaction pre and post crash independently, I don't get it
Example

Current share price is 3
Buys a put option at 2 which costs 0.1 up front
Bombs
Share price goes down to 1
Buys shares on open market for 1 and uses option to sell back for 2
Makes profit of 0.9 after 0.1 fee
 
Example

Current share price is 3
Buys a put option at 2 which costs 0.1 up front
Bombs
Share price goes down to 1
Buys shares on open market for 1 and uses option to sell back for 2
Makes profit of 0.9 after 0.1 fee
Okay .Got ya
your other example the guaranteed price option was higher than share price not lower
 
I'm guessing that the number of non Muslim/Islam related terrorist attacks in Europe in the past few years has been so small as to be almost insignificant.

Without them today's massive security measures would hardly be needed, be insignificant and hardly noticeable in contrast to the sad sight of police armed with assault rifles etc. that greets us today in so many public places, in addition to the even greater security measures taking place online and behind the scenes.

Life for everyone would be so much more relaxing.
 
Presumably he bought the shares under his own name? Please don't tell me he booked into the hotel under it anarl! Then acted all casual while everyone was panicing? FFS am I the only person left on the planet who actually watches cop shows on the telly?
Never seen owt like this on Lewis
 
I'm guessing that the number of non Muslim/Islam related terrorist attacks in Europe in the past few years has been so small as to be almost insignificant.

Without them today's massive security measures would hardly be needed, be insignificant and hardly noticeable in contrast to the sad sight of police armed with assault rifles etc. that greets us today in so many public places, in addition to the even greater security measures taking place online and behind the scenes.

Life for everyone would be so much more relaxing.

We should stop subsiding its principal source then
 
Status
Not open for further replies.

Back
Top