how do options work

[tiger_handheld]

so i know hte basics about options, ( ie; place a call or put order , )

but whta i dont know is , how do u know how many shares are included in each option

can someone gimme a brief on how to...., or point me somewhere i can read the brief ..

[dmitri81]

so i know hte basics about options, ( ie; place a call or put order , )

but whta i dont know is , how do u know how many shares are included in each option

can someone gimme a brief on how to...., or point me somewhere i can read the brief ..

All options have an underlining value of 100 shares. That is the industry standard. The only time that changes is when there is a split or a consolidation or a spin off.

Its best to read up on www.m-x.ca or www.cboe.com

[bcbgboy13]

can someone gimme a brief on how to...., or point me somewhere i can read the brief ..

Visit the "option school" (http://www.thinkorswimcanada.com/tos/displayPage.tos?webpage=trainingProducts) at www.thinkorswim.ca - this is probably the best brokerage for option trading:

[pitz]

Two words: Black-Scholes

[dmitri81]

Two words: Black-Scholes

The Black-Scholes options pricing formula means little to nothing to the average investor.

[pitz]

The Black-Scholes options pricing formula means little to nothing to the average investor.

How do you figure that? 'Average' investors don't use options :). B-S is a very useful tool to determine the 'cost' of an option (by way of implied volatility).

[FrugalTrader]

so i know hte basics about options, ( ie; place a call or put order , )

but whta i dont know is , how do u know how many shares are included in each option

can someone gimme a brief on how to...., or point me somewhere i can read the brief ..

If you're looking for more details on how call/put options work, we had a Bay Street broker write a guest article for us regarding the topic. The article is split into 3 parts, the basics, examples, and how to "write" options.

Best to start here:
How Call Options Work - The Basics I (http://www.milliondollarjourney.com/how-call-options-work-i-the-basics.htm)