CHAPTER 1Options Basics

Are you a little unclear as to exactly what options are? Take a look at the following two situations:

1. You have just listed your house for sale, asking $250,000. A gentleman comes in during the open house and says that he likes the place very much, but he wants to consult with his wife, who is currently out of town. He proposes the following: He will pay you $3000 to hold the house for 7 days, at the end of which period he will either buy it for the $250,000 asking price or simply abandon his right to purchase it, freeing you to put it back on the market. Whether he purchases the house or not, the $3000 is yours to keep.

2. You have just purchased the latest in sports car technology. It is, of course, red. But being ...

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