Can someone explain the Option Chain of AMD for me?
"When you buy a put option, you're buying the right to sell stock at the ""strike"" price. To understand why you have to pay separately for that, consider the other side of the transaction. If I agree to trade stock for money at above market rates, I need to make up the difference somewhere or face bankruptcy.  That risk of loss is what the option price is about. You might assume that means the market expects the price of AMD to fall to 8.01 from it's current price of 8.06 by the option expiration date. But that would also mean call options below the market price is worthless. But that's not quite true; people who price options need to factor in volatility, since things change with time. The price MIGHT fall, and traders need to account for that risk. So 1.99 roughly represents the probability of AMD rising to 10. There's probably some technical analysis one can do to the chain, but I don't see any abnormality of AMD here." The buyer pays $1.99/share for the option of selling a share of AMD to the seller for $10 which is currently $1.94 higher than the price of $8.06/share.  If you bought the put and immediately exercised it, you would come out of the deal losing $.05/share. "The current price is $8.05. If you want the right to sell it to someone (put it to the buyer) for $10, you have to pay $2. Since you're looking at an expiration that's so close, the ""in the money"" value is nearly the same as what it trades for. The JAN 2013 sells for nearly $3."
"Many of my friends said I should invest my money on stocks or something else, instead of put them in the bank forever. I do not know anything about finance, so my questions are: First let me say that your friends may have the best intentions, but don't trust them. It has been my experience that friends tell you what they would do if they had your money, and not what they would actually do with their money. Now, I don't mean that they would be malicious, or that they are out to get you.  What I do mean, is why would you take advise from someone about what they would do with 100k when they don't have 100k. I am in your financial situation (more or less), and I have friends that make more then I do, and have no savings. Or that will tell you to get an IRA -so-and-so but don't have the means (discipline) to do so. Do not listen to your friends on matters of money. That's just good all around advise. Is my financial status OK? If not, how can I improve it? Any financial situation with no or really low debt is OK. I would say 5% of annual income in unsecured debt, or 2-3 years in annual income in secured debt is a good place to be. That is a really hard mark to hit (it seems). You have hit it. So your good, right now. You may want to ""plan for the future"". Immediate goals that I always tell people, are 6 months of income stuck in a liquid savings account, then start building a solid investment situation, and a decent retirement plan. This protects you from short term situations like loss of job, while doing something for the future.   Is now a right time for me to see a financial advisor? Is it worthy? How would she/he help me? Rather it's worth it or not to use a financial adviser is going to be totally opinion based. Personally I think they are worth it. Others do not. I see it like this. Unless you want to spend all your time looking up money stuff, the adviser is going to have a better grasp of ""money stuff"" then you, because they do spend all their time doing it. That being said there is one really important thing to consider. That is going to be how you pay the adviser. The following are my observations. You will need to make up your own mind.  Free Avoid like the plague. These advisers are usually provided by the bank and make their money off commission or kickbacks. That means they will advise you of the product that makes them the most money. Not you.  Flat Rate These are not a bad option, but they don't have any real incentive to make you money. Usually, they do a decent job of making you money, but again, it's usually better for them to advise you on products that make them money. Per Hour These are my favorite. They charge per hour. Usually they are a small shop, and will walk you through all the advise. They advise what's best for you, because they have to sit there and explain their choices. They can be hard to find, but are generally the best option in my opinion.   % of Money These are like the flat rate advisers to me. They get a percentage of the money you give them to ""manage"". Because they already have your money they are more likely to recommend products that are in their interest. That said, there not all bad. % or Profit These are the best (see notes later). They get a percentage of the money they make for you. They have the most interest in making you money. They only get part of what you get, so there going to make sure you get the biggest pie, so they can get a bigger slice. Notes In the real world, all advisers are likely to get kickbacks on products they recommend. Make sure to keep an eye for that. Also most advisers will use 2-3 of the methods listed above for billing. Something like z% of profit +$x per hour is what I like to see. You will have to look around and see what is available.  Just remember that you are paying someone to make you money (or to advise you on how to make money) so long as what they take leaves you with some profit your in a better situation then your are now. And that's the real goal." I do this often and have never had a problem.  My broker is TD Ameritrade and they sent several emails (and even called and left a message) the week of expiry to remind me I had in the money options that would be expiring soon. Their policy is to automatically exercise all options that are at least $.01 in the money.  One email was vaguely worded, but it implied that they could liquidate other positions to raise money to exercise the options.  I would have called to clarify but I had no intention of exercising and knew I would sell them before expiry. In general though, much like with margin calls, you should avoid being in the position where the broker needs to (or can do) anything with your account. As a quick aside:  I can't think of a scenario where you wouldn't be able to sell your options, but you probably are aware of the huge spreads that exist for many illiquid options.  You'll be able to sell them, but if you're desperate, you may have to sell at the bid price, which can be significantly (25%?) lower than the ask.  I've found this to be common for options of even very liquid underlyings.  So personally, I find myself adjusting my limit price quite often near expiry.  If the quote is, say, 3.00-3.60, I'll try to sell with a limit of 3.40, and hope someone takes my offer.  If the price is not moving up and nobody is biting, move down to 3.30, 3.20, etc. In general you should definitely talk to your broker, like others have suggested.  You may be able to request that they sell the options and not attempt to exercise them at the expense of other positions you have. "A check is simply an order to the bank to pay money to someone. The payor's signature on the front of the check is all that's needed to make that order binding. If you read the check carefully, you'll see that it says ""Pay to the order of ...""; that's the payor's instruction to the bank, and as payee you can make a further order, to pay the money to someone else, in which case you'd have to endorse the check to make your order binding. But nobody does that any more; instead, people always just deposit checks into their accounts. When you deposit a check, the payor's signature is all that's needed to tell the payor's bank that it should pay the money. If your bank insists on a signature as well, that's just to pretend that they're paying attention in case it turns out that you stole the check. In reality, banks don't pay attention to signatures, nor to the name of the payee. I once put the wrong check into an envelope, and the phone company got a check for something over $700 on a bill of less than $50, payable to some completely different company; they deposited it and gave me a credit for the balance; none of the banks in the transition chain questioned it." "hey numb nuts, I've been working with blockchain implementation since before you became an armchair investor.  blockchain technology is an implementation of security by consensus, it can be between 2 people, and 100 million. bitcoin's incentive is the mother of all pyrimid schemes,""put value into this, so it has value, so you can get value out of it"". It was never suppose to be industrialized in the way it has been, and it's become an amoral waste of resources. further evidence can be found in the fact that bitcoin HAD no value except as a currency before people started hacking contracts and the like into it. Etherium is admirable in that it actually has some kind of intent of value built into it, but it's simply not good enough for high demand applications.  in a private chain, mining doesn't operate with an increasing cost, it *could* be done by a single system, which is good enough for an internal chain. The security comes from the immutability of the chain that is generated which is what everyone subscribed to the chain gains. once something is added, no amount of hacking a centralized system could change the confirmed blocks, an attacker might be able to add a bunch of new blocks, but you could (with consensus) roll back the entire chain.   as a simple example: a company has several partners who it coordinates exchange rates with. they set the value and they want to share that with their partners, while keeping an entirely tamper proof history of the set values. they start the chain, and allow their partners to subscribe to it. they can then set their system to add a block every hour, which contains the set values. now every partner is keeping a consensus based record of what the trading values were when. If for whatever reason an audit was required (ie say they suspect someone was trading higher/lower than they should have) they can audit the chain and see exactly what everyone agreed would be the price at the time the exchanges were made. if a partner messed with his chain to cover whatever shadiness he would be involved in, the other's would refute it. It would be exceptionally hard for any single bad actor to alter all the chains.  the incentive in a private chain is rolled into business incentives for record keeping. They gain value by keeping certain types of records secure in this manor, therefore it is worth it to do, they don't need a literal payout to keep their own records secure.  this is why companies want to use the blockchain, immutable records, secured by even loose consensus are more secure than a centralized database, but with little to no increase in operation overhead. It then further gains value in that it could lead to distributed &amp; geosafe recorder keeping and management.  TLDR: lol you armchair finance guys." Unfortunately when you deal with options you are going to have to accept some exposure to your greeks. So in your example, you could just buy back month ATM calls. Although delta is going to be pretty static across your portfolio (at least for say the first year, depending on ultima/zomma and other third order greeks) which will keep your lambdas in check, you're still exposed to vega which will ultimately skew lambdas across the board.   Such are the caveats of options - in order to obtain leverage you will need to take a *less* passive outlook, but not by much. I am going to. Like I said I have not traded options much in general, but I can see a lot of potential in derivatives in general, and it makes me kind of grin. In the case of commodities, the advantages are really apparent. The only problem I see with stock options is that they expire, and thus if you are more long term bull on a stock, it would be harder. But for things like commodities, that are shorter term any ways and require margin, it makes a lot of sense IMO. I could see how you could gain a larger diversification through options (being able to bet on Russell 2000, S&amp;P, etc. ) or esoteric markets (electricity).   I will look up that book that you mentioned. Thanks man. Let's say a stock trades at $100 right now, and you can buy a $100 call option. When you buy the call option (and the money you paid is gone), one of two things can happen: The share price goes up, or the share price goes down.  If the share price goes up, you profit. If the share price goes down, you don't lose! Because once the shares are below $100, you don't exercise the call option, and you don't lose any money.  So if you have a share that is rock solid at $100, you don't make money. If you have a share where the company owner took some ridiculous risk, and the shares could go to $200 or the company could go bankrupt, then you have a 50% chance to make $100 and a 50% chance to not lose anything. That's much more preferable. There could also be some degree of dilution at play here. If they are rapidly expanding and hiring, or if they took on another round of funding each share may have a lower amount of value though the company might be worth more than they were previously. The newly issued options may also be of a different class.