/biz/ - Business & Finance

>gacha cancer has metastasized into finance
Thats it, crashing the whole ass economy.

CRASH COURSE IN PURCHASING OPTIONS
>Imagine someone put 100 shares in a sealed box that needs to be opened by X date.
>That box is an option.
>The shares are valuable because if you exercise the option, you unwrap the box and you get the shares for the price you bought them at, but only worthwhile if the price of shares changes to the strike price you picked or better.
>ie when ANON is worth $150, you could open your call box of 100 shares worth $1 and be in the position for much cheaper.

>The option/the box itself is valuable because other people would like the advantage described. You can sell your box to somebody else.
>The closer the price of shares are to your strike price compared to the shares in your box makes your box more valuable than what you purchased it at.
>Since options expire, your box will lose value on the market as there is less and less time for other parties to possess it safely.
>You don't have to meet your strike price to profit from selling the box, you just need to be closer than when you started within a certain timeframe.

>Selling the box is common. Opening the box is less so but is worthwhile for the right circumstances.
>Timing the market fucking sucks however and this is why options are considered gambling far more than shares are.

When you short a share and it rises in price so you're forced to buy it, is that a margin call? What determines when you're forced to buy it?

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