Understanding Put and Call Options - HOW TO USE THEM TO REDUCE RISK IN YOUR STOCK MARKET OPERATIONS

It is strange that a business which has been in existence as long as the business of stock options has never been fully explained, except in leaflet form. As far as I can learn after searching through libraries and college reference books, no complete book has ever been written explain­ing all of the uses and facets of the business. I have written numerous articles about options, including one for and at the request of the Encyclopedia Britannica, and the pres­ent edition contains that explanation of the uses of options. But in this book I propose to give the history of options and the various uses of the Put option contract, the Call option, and their variations and combinations such as the Spread, Strip, Straddle, and Strap. Now I will say simply that a Put option is an option to sell (or "Put") at a specific price within a specified time limit. A Call option is an option to buy (or "Call for") at a specified price within a specified time. These will be thoroughly ex­plained shortly, as will Spreads and Straddles. I will show by example just how they can be used in market opera­tion