Stock options - can someone explain how they work?
Answers: stock options typically are granted on a specific date. the option price is tied to the date of the grant. often there is a stipulation that the shares will vest over some period (20% per year for 5 years) and expire usually by 10 years. if the stock price goes up, you are in good shape. if it is flat or declines in value its not worth the paper it was printed on (unless you need a tax loss).
when you are ready to sell you can exercise and hold or exercise and sell (capital gains). if you exercise and sell it is considered a short term capital gain, usually the brokerage will cover the cost (option price * number of shares you are selling) as part of their fee. if you exercise and hold you will need to fund the value of the options.
example of exercise and hold
100 shares with an option price of $50 and a current price of $75. you fund the $5000 and receive 100 shares worth $7500.
example of exercise and sell
100 shares with an option price of $50 and a current price of $75. you pay a fee to the broker who funds the $5000 and sells the shares at their full value of $7500. they recoup the $5k and you receive $2500 less whatever the commision is (varies depending on brokerage)
the benefit of stock options is they are good incentive for key employees to continue to contribute their skills. hope that helps explain things.
I'd love to type out a very detailed explanation, but I'll refer you to a better site. :-)
Go to www.investopedia.com and either search for options or follow this link:
http://www.investopedia.com/university/o...
There are other items on that site that offer educational items on options.
There is also the Options Industry Council (www.888options.com) which provides a ton of options education at no cost.
I just bought ETF on 1/25/08, do I get dividend monthly or quarterly?
Answers: Some do pay monthly and some pay quarterly. Without knowing what you bought it would be just a guess. Let me guess quarterly.
But if you just happend to buy FHY, RDR, or FHI. One of those type ETFs then it would be monthly.
Some ETFs don't pay dividends at all. I suggest looking up your EFT in Yahoo! or G00GLE Finance at either http://finance.yahoo.com or http://finance.G00GLE.com. Either one of these sites should have all the information you are looking for. God luck!
Does anyone use TradeKing to trade option? What is within online community approaching? Is it exceedingly of assistance?
Can you trade option spreads within an IRA account? Do they enjoy streaming quotes and streaming charts with real-time indicators? What is your overall judgment of TradeKing? Thanks for your opinions on any of this!Answers: Dear Joyce,
I use TradeKing and am completely satisfied. TradeKing is the online stock trading site to checkout for low cost trading. This is their point and SmartMoney.com, Barron’s and Kiplinger all agree. If you are looking for the best prices on trades, this is the place to start. And yes, they own streaming quotes and streaming charts with real-time indicators.
Trading selection spreads in an IRA statement may be possible if you fits in near your investment strategy.
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