Options has always been a intriguing subjects and somehow very confusing to a lot of people. In this post, I will try to simplify and explain it in a lay man terms, for call options and in my next post, I will explain on Put Options.

We actually uses a lot of call options in our daily life. We just do not realize it or it is not called “Call options” here are some of the normal call options most people encounter in their daily life but they just do not realize it.

For examples:

1. When you are buying a house, you place a booking fee of 1% or a sum of money so that the seller cannot sell it to another person for a certain period of time until you come up with the payment of the  downpayment of 20% or more to carry on with the purchase, however when you decided on the next day that you have made a bad choice as that house value you realized is not worth the sales value, you can decide to stop the purchase process and forfeited your booking fee of 1% or so.

By placing the booking fee, you became the buyer of  the call option which is the right to purchase the house at the agreed price for a limited time. While the seller of the house being in possession of the physical house became the seller of the call option, he sells you the right to buy his house and therefore he has the obligation to deliver the physical house to you upon the full payment of the house given.

2. Shopping Vouchers - is another type of call options that we uses a lot in our life but we just do not realize it. We bought a shopping voucher normally with specific value in each of the voucher that will be valid until a certain time. You became the buyer of the call options in this case and the merchant became the seller of the call options. What happens when you did not use your shopping voucher till the end of the validity date? You will not be able to use those vouchers anymore as they became worthless and you lost all the money paid to buy those vouchers.

Options whether call or put has validity date which we traders called expiry date of the option. When you think about it, actually our life do involve a lot in buying a call options, such as buying a prepaid parking tickets, prepaid one year access to recreation park or to the zoo, prepaid phone cards, buying our home appliances by placing a deposit first and full payment upon delivery.

In many events of our life, we actually in one form or another transact with buying or selling an “option” though the terms is not at such.

Call Options in Stock Market or in future market works in the same manners as the above. When you buy a call option, means you have the right to buy the stock which is the underlying asset of that options at the later date with limit to the expiry date of the option contracts at the agreed price

When you buy a call option, you have the Right to Buy the underlying stock - The key word here is the Right to Buy which means you are in control which also means you can decide whether to buy or not to buy. When you decided to Buy the stock, what you need to do is just Exercise your options, as a buyer you exercise your right.

However as a Seller, when you sell a call option, you no longer have the right, but now you have an OBLIGATION that you should fulfilled by delivering the asset when the buyer of your call option decided to use his or her right to buy the underlying stock. Which is called assignement - this is what happen when someone exercise their right, your call options has got assignment. As a Seller you have been assigned to fulfilled your obligation.

Call Options is not as complicated as it sounds but you need to be real careful when you are trading options as it can become a very expensive learning experience.

Hope that this brief explaination can help to interest you more to know about one of the most flexible and powerful financial instrument available.

The Trend is uprising. As I look through Newspaper in Singapore, in Indonesia, in Thailand and believe it is the same in other countries, I saw many people are selling their course on how to trade with options. Sad but truth is that these people who are selling you the dream of getting rich overnight, are not really interested in teaching you the truth about the trade but rather your money in your pocket.

Options is one of the most sophisticated financial instrument available today in the market. It is highly leverage and it is highly flexible in applications. Options can be a double edged sword to your investment if you do not know how to use it. Those people selling the course on options trading may not really realize what they get those people into, because a lot of them do not really know what they are talking about.

It took me 2 years to make my options trading profitable, guess what after going through more than 3 very expensive courses about option trading, I realized that those people are just “Super Sales People” but they are nothing more than that. Even if they are as good as what they claim to be, definitely they are not interested to teach you what they know about options trading.

In fact if you want to really learn about options trading, there is a place where you can find really excellent materials on options trading and even much better than what these so called “options guru” are giving you. and it is even better because it is for FREE. Yes, guess what after 2 years and after spending more than $15,000, I have found a better and Free way to learn about option.

Learn all about Options Trading for Free at the following website:

1. theocc.com
2. 888options.com

These two website is definitely important websites you always want to put in your explorer bookmarks if you want to trade options (of course besides IntendedForSuccess.com). Guess what? I have learn much more from these 2 sites than from those expensive courses I have paid.

Well I am one of those who are quite sick and tired with all the promises advertise by these so called gurus. So I am very determine to share a lot of stuff about options in this Blog.

Do stick around and from time to time you will learn how to manage your investment risk with Options.