Quote:
Originally posted by broke
(Additionally)
Options are also sometimes used to hedge postitions while estates are being divided or in similar situations (i.e. legal disputes) where ownership of the stock is in question and cannot therefore be immediately sold.
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Oh yeah, there are alot of great things options can do. However, they can eat up a small time investor like us. Because your not buying 7000.00 worth of stock (in this example) but rather 315$ worth of stock on the same underlying asset, you can invest more, for less. But, as any derivative, the swings are fast and hard. a 1% change in the 7000.00 will make a larger change ( i am too drunk to mess with actual numbers) in the 315$.