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Originally posted by Daval
No I havnt. I always thought they were much more volatile and dangerous than penny stocks, where they not?
Can you recommend a website or good books where I can learn about options & futures? I know nothing about them.
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Futures and options are more dangerous, especially options. I'd recommend the CME website above all else, they're pretty good about explaining them. If you're still interested, I'll dig around and find some newer titles-- the ones I have are mostly old textbooks from the early 90s.
One thing you can do with options which is kind of fun and relatively safe:
Say you buy 1,000 shares of XYZ at 24. You can sell 10 covered calls of XYZ for one month out with strike 25 and probably raise .60-.70 per. That works out to $600 to $700. If XYZ is out of the money (less than 25 and some change) come expiration, the option expires and you keep the money. If it's in the money, you're forced to sell at $25. Not a bad return for a month. Two problems:
1)It will keep you from making the "big money" should lightning strike and the stock go to 100;
2)Some brokerages restrict options trades to covered calls only, meaning that if the stock falls below your comfort level you won't be able to dump it without covering the option first.
Bob