Most people familiar with stocks and bonds know there’s a place called „Wall Street“ and that investors trade millions of shares of stock there. Stocks are shares in a company that issues them for sale to the public and they give investors ownership in the companies that issue them. In total, probably billions of shares are bought and sold each day on stock markets all over the world, such as New York City’s Wall Street exchange. Buying and selling stock is simple enough, in truth, but something like live options trading in real time should be thoroughly understood by new investors before they engage in the practice.

A stock option is actually a contract written by an investor, known as a writer, that gives its purchaser the right to trade in the contract’s underlying stock at an agreed-upon price. Under a stock option, you obtain the right to buy or sell shares of the stocks found within the option but no actual obligation to do so by the time the contract expires. All option contracts feature fees or premiums paid by their purchasers and charged by those contracts‘ writers, with the writers then promising to convey to the contract purchasers the shares being bought or sold by contract purchasers when they exercise their option rights. On a daily basis, traders in options engage in a seemingly countless number contract transactions, usually through some sort of automated or software-based live options trading website or platform.

The essence of live options trading taking place among and between traders is that it all occurs right in the moment, or live. Most options trading done in real-time or in the real world, with blocks of such option shares typically packaged in 100-share increments, also occurs through the assistance or facilitation of a website or some sort of software package written specifically to support such trading. Today, most such options trading software is written so that it can make automated buy or sell decisions based on information inputted by its user.

On the market today there are a wide variety of options trading software programs able to help traders engage in live options trading, with some programs more useful than others. Before purchasing any sort of software to support your options trading, take a bit of time to research whether it’s actually useful or not. As far as options trading, keep in mind that it’s more complicated and technically complex than the simple act of buying or selling a share of stock and that it will take time to master. When you trade in stock options in a real-time environment such as through a software program you’re making split-second financial decisions that could quickly prove ruinous if done incorrectly, and it’s not for the weak-kneed. If you don’t become skillful at options trading you elevate the level of risk inherent in the act when you carry it out, in other words.

In truth, many stock market investors aren’t even located in New York City or one of the world’s other cities where such exchanges are sited. For hopeful traders, the Internet means that they can trade stocks or buy or sell option contracts in them on any of the world’s major exchanges right from the comfort of their own home, wherever that may be. But just because you can run onto the same playing field occupied by veteran traders doesn’t mean you’ve yet gained the ability to play the same game in which they’re involved, most especially as it pertains to live options trading. Before you undertake even a very small options trade via a website or a software program, or in any other manner, you’d be well-advised to first learn the ins and outs of options trading itself.

Because stock options are indeed risky investment securities or financial instruments, it’s recommended that you spend a period of study and training with options trading experts in learning just how they work. In an activity such as live options trading, for example, you’ll be taking what are called „positions“ with some regularity. Taking a position in a stock or an option means you’ve made a buy or sell decision as well as a kind of bet on whether the stock underlying your position will increase or decrease in value. Savvy stock options traders thoroughly study the stocks that serve as the foundation of options contracts, including Internet chatter and any news about the companies issuing them, before they take a position on those stocks.

Also, if you’re considering trading options in real time you need to realize that most investors don’t actually exercise the options they’ve purchased. Keep in mind that a stock option is really a gamble that gives you a right to decline to exercise it and you lose only the premium you paid to gain the option in the first place. To cite an example, suppose you pay a $100 premium to gain the right to purchase 100 shares in XYZ Company at a share price of $10, about $2 less than its current worth of $12 per share. If your option contract’s expiration rolls around and XYZ Company’s stock is still priced higher than the $10 per share at which you hoped to purchase it, also called its „strike price,“ you simply decline to exercise your option contract’s stock purchase rights and that’s about it.

There are really just two basic types of options contract, the call and the put. A call option contract is written by the investor selling it to allow its purchaser to gain a right to purchase the shares found within that particular contract. A put option contract, on the other hand, conveys to its purchaser a right to sell the shares underlying that contract. Put options and call options are traded with great vigor when it comes to live options trading. The majority of call as well as put options only last a relatively small amount of time, typically days, or a few weeks or a month at the most, though there are contracts that can last one, two or three years. If you’re intent on becoming a serious options trader you need to take the time to gain a thorough understanding of how put contracts and call contracts operate.

Learn more about live options trading today. Stop by OptionMillionaires.com, where you can find out all about the potentially lucrative world of stock options trading and what it can do for you financially.