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68340 | Yes, you have it right. Yes, you are speculating, only with less risk than if you bought or sold an actual contract for the $5.00 corn. In turn your rewards are less also. Options do not move penny for penny as if you actually bought a contract. If the market goes up or down, for example 10 cents, the option may only move 6-8 cents. Maybe more maybe less than that.
I learned the hard way. I sold a call. I had margin calls. My own ignorance.
Yes, the most you can loose in options, ( buying an option, not sell one) is the money you spent. I believe you said 25 cents, that is the most you could loose. | |
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Options Question
