Understanding Stock Options

Date Monday, November 24th, 2008

Stock/Share is the money invested in the company/industry for business purposes. Even if you invest a small amount of money in a company’s stock, you partly become the owner of that company. Consequently the loss or gain of the company is yours.
For the investment in stock it is necessary to study a lot about the company and the economy of the country. The advice by the broker or the investment company must be given due consideration. However the final decision to invest money in the particular company should be yours.

The stock options are:
1. Short term investment (speculation): the stocks are brought and sold in short time period. In either case (loss or gain) the option fee or the brokerage is to be given.
2. Long term investment: the investment is for longer time period i.e. at least one year. This is for the appreciation of to stock value to counter the inflation. The person also gets dividend / profit periodically as an additional income.
3. Mutual funds: there are mutual fund companies where money can be invested for stock. These basically help the new entrant to the stock market and keep balance of investment in the good profit making companies. The individual invests in the mutual fund company. Then the mutual fund company with the help of the financial experts invests in the appropriate profit making and stable companies.

by Dorothy Wilde

One Response to “Understanding Stock Options”

  1. Tim Says:
    December 6th, 2008 at 3:20 am

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